BSE Announces New Expiry Dates for Single Stock Derivatives Starting 1st July 2024

The Bombay Stock Exchange (BSE) has announced a significant change to the expiry date for its single stock derivatives. Starting from July 2024, the monthly contracts of single stock derivatives will see their expiry day moved to the second Thursday of each month. This strategic change will impact traders and investors involved with equity derivatives.

Background on the Change

Previously, the monthly contracts for single stock derivatives were set to expire on the last Thursday of each calendar month. However, as of July 1, 2024, this will no longer be the case. This adjustment aims to standardize expiry dates and possibly align them more closely with global market practices, although the BSE has not explicitly stated this as the reason.

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Key Details of the Announcement

• Final Expiry under Old System: The BSE noted that all existing monthly contracts under the old system would expire on June 28, 2024. This final expiration date marks the transition point, after which these contracts will be removed from the BSE's contract master file and will no longer be available for trading.
• Launch of New Contracts: In preparation for this transition, new contracts that adhere to the updated expiry schedule will be generated at the end of the day on June 28, 2024. These will be available for trading from July 1, 2024, and will feature three serial monthly expiries, now expiring on the second Thursday of each month. If this day happens to be a holiday, the expiry will shift to the previous working day, maintaining consistency.

Impact on Traders and Investors

This change requires traders and investors to adjust their trading strategies and calendars. The shift could influence trading behaviour around the expiry dates, potentially affecting liquidity and volatility. It's crucial for market participants to stay informed and prepare for these changes to manage their positions effectively.

The BSE's decision to alter the expiry day for single stock derivatives represents a significant shift that will require careful planning and adaptation by all market participants. As the final expiry under the old system approaches, traders and investors should review their strategies and ensure they are prepared for the new schedule starting in July 2024.

The BSE's notification underscores the importance of adhering to exchange communications and keeping abreast of changes that could impact trading activities. As always, staying informed is key to navigating the complexities of equity derivatives trading effectively.

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