Options on a new clock: The day swap that could tilt the stock market

Expiry-day swing gives NSE a chance to reclaim lost territory from BSE

Equity market traders may see a marked shift in trading patterns as the National Stock Exchange (NSE) and BSE swap the expiry days for their derivatives contracts, signalling a potential turning point for futures and options (F&O) trading. 

From this week, NSE’s weekly Nifty contracts will expire on Tuesdays instead of Thursdays, while BSE’s Sensex contracts will move to Thursdays instead of Tuesdays. 

Last week marked the final Thursday expiry for Nifty contracts. Monthly, quarterly, and half-yearly contracts will also adopt the new Tuesday (NSE) and Thursday (BSE) schedules. 

The move follows recent directives from the Securities and Exchange Board of India (Sebi) limiting weekly derivatives expiries to two days per week. The measure aims to improve “quality and balance” in derivatives trading and reduce excessive retail participation. 

Sebi has further restricted weekly F&O expiries to a single benchmark index per exchange to curb retail trading risks. As a result, NSE discontinued weekly derivatives for Nifty Bank, Nifty Financial Services, and Nifty Midcap Select, choosing Nifty 50 as its sole benchmark. Similarly, BSE phased out weekly expiries for Bankex and Sensex 50, opting for Sensex as its benchmark. 

Expiry refers to the last valid day for an F&O contract. Both exchanges offer weekly, monthly, quarterly, and half-yearly contracts, with positions required to be settled by the expiry date. 

Analysts expect this swap could shift market share in index options trading, with NSE likely to reclaim some lost ground from BSE. 

A recent Goldman Sachs note warned that BSE could lose around 3 percentage points of market share and see a 2 per cent decline in 2025-26 earnings per share. 

The expiry swap responds to BSE’s shift to Tuesday expiries in January 2025, which lifted its volumes. NSE had considered moving to Monday expiries, but Sebi limited exchanges to Tuesday or Thursday for index options. Previously, BSE benefited from three working days for weekly expiries compared with NSE’s two.