On March 4, 2025, the National Stock Exchange (NSE) announced significant changes to the expiry days for its futures and options (F&O) contracts affecting Nifty, Bank Nifty, FinNifty, and other indices. Beginning April 4, 2025, the expiry for these contracts will shift from the current Thursday to Monday, aiming to streamline trading operations and improve market efficiency.
This adjustment marks the end of the long-standing Thursday expiry for Nifty derivatives, with monthly contract expiries now scheduled for the last Monday of every month. This change not only affects major indices like Nifty and Bank Nifty but also includes subsidiaries such as Nifty Next50 and Nifty Midcap Select.
The circular indicating these changes was issued on Tuesday, and it signals the first major operational shift under the chairmanship of Tuhin Kanta Pandey at the Securities and Exchange Board of India (Sebi). This move stems from earlier decisions made as part of modifications to existing NSE policies, which included the scrapping of weekly contracts for some indices earlier this year.
"The revised expiry date of all existing derivatives contracts will be available in the contract file which will be generated on April 03, 2025, end of the day, which will be applicable for trading on April 04, 2025," the NSE articulated in its recent announcement.
This change has been prompted by broader attempts to adapt the trading environment to changing market dynamics. It is worth noting the broader trends within Indian markets, particularly as various exchanges adjust their operational strategies. Earlier, the Bombay Stock Exchange (BSE) made the similar decision to push monthly expiry dates for the Sensex and related indices to the last Tuesday of each month, effective January 1, 2025.
The immediate market response to the news of these changes has reflected investor sentiment. On the same day the announcement was made, the Nifty experienced its tenth consecutive decline, demonstrating the challenges faced by the market. This marked the longest losing streak for the index since its inception, with reports showing it closed at 22,082.65 after falling 36.65 points or 0.17%. Concurrently, the BSE Sensex decreased by 96.01 points, closing at 72,989.93—a 0.13% drop.
Despite the struggles, analysts express caution and optimism. Rupak De, Senior Technical Analyst at LKP Securities, indicated, "Nifty remained bullish throughout the day, finding support around 22,000 on a sustained basis." He emphasized the need for vigilance, noting, "Though sentiment has not turned positive, there are signs of the index finding support around the 21,800–22,000 zone. A decisive fall below 21,800 could alter the current forecast on the market's health."
These updates come at a time when manipulatory practices are increasingly being curtailed, generating discussions about market integrity as newer guidelines are being instituted under Pandey's leadership. This is also seen as part of the continuous evolution of trading practices as markets adapt to greater regulatory scrutiny.
The decision is expected to have ramifications not only for traders but also for institutional investors who often manage trades against these contracts. The efficient processing and management of expirations may lead to reduced volatility as banks and funds adjust positions more systematically against the new expiry framework.
Moving forward, it’s imperative for traders and market watchers to remain abreast of these adjustments and understand their impacts comprehensively, especially as they navigate the hot bed of current stock market conditions. Adapting strategies to interface with these new rules could define the trading success for entities engaged with Nifty and its aligned indices.
Therefore, the coming weeks and months will be pivotal for many involved parties—from everyday traders to institutional firms—as everyone acclimatizes to the new Monday F&O expiry day rhythm implanted by the NSE.