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NSE Discontinues Weekly Expiry for Bank Nifty, Midcap, Fin Nifty

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Synopsis:

NSE opts to retain Nifty 50 weekly options post-SEBI mandate. Bank Nifty, Midcap, and Financial Services weekly options will be discontinued after November 20, 2024. BSE retains Sensex weekly contracts while discontinuing Bankex weekly contracts.

The National Stock Exchange (NSE) has confirmed that it will retain its Nifty 50 weekly options contract while discontinuing weekly contracts for Bank Nifty, Nifty Midcap, and Nifty Financial Services indices.

This decision aligns with a Securities and Exchange Board of India (SEBI) circular mandating exchanges to offer weekly derivatives contracts on only one benchmark index starting from November 20, 2024.

The new guidelines mean only two indices—one from NSE and one from BSE—will have weekly expiries moving forward.

Under the new framework, NSE will have its last Bank Nifty weekly options trading session on November 13, 2024. Similarly, the final trading days for Nifty Midcap and Nifty Financial Services contracts will be November 18 and November 19, respectively.

No new weekly options contracts will be created for these indices beyond these expiry dates.

BSE Follows Suit with Sensex Weekly Options

Following the SEBI directive, the Bombay Stock Exchange (BSE) also announced that it will discontinue weekly contracts for both its Sensex 50 and Bankex indices, with the last Bankex weekly options available until November 18, 2024.

From November 14, 2024, the BSE will continue only with weekly derivatives contracts on its flagship Sensex index, which consists of 30 blue-chip companies. The decision to retain Sensex over Bankex is primarily due to the former’s larger trading volumes.

Impact of SEBI’s New Rules

The SEBI directive is designed to reduce concentrated trading activity on derivatives' expiry days. Currently, the market experiences an options contract expiry every trading day. However, after November 20, 2024, only two contracts will expire weekly, potentially altering trading behaviours for both retail and institutional participants.

Last Trading Days for Key Contracts

Bank Nifty: November 13, 2024.

Nifty Midcap: November 18, 2024.

Nifty Financial Services: November 19, 2024.

Bankex: November 18, 2024.

As the number of expiry days reduces from five to two per week, and the variety of derivative products narrows, traders may need to adjust their strategies to accommodate the changes. This shift in market dynamics is expected to redistribute trading volumes across the continuing weekly contracts, primarily focusing on the Nifty 50 and Sensex indices.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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