Revision of Expiry Day for Index and Stock Derivatives – NSE Circular 103/2025

On June 17, 2025, the National Stock Exchange of India Limited (NSE) issued Circular No. 103/2025 (Download Ref. No. NSE/FAOP/68589), following SEBI’s May 26, 2025 directive (SEBI/HO/MRD/TPD‑1/P/CIR/2025/76) on the Final Settlement Day for equity derivatives contracts. This circular applies the conventions of Tuesday expiry for both existing and upcoming index and single stocks F&O. It aims to align with NSE practice with SEBI guidance to ensure a smooth market transition.

What Is The Background And Rationale Behind This Approach?

The implementation of final settlement day by SEBI will help streamline the expiries of all equity-derivative-based contracts and also the operational clarity will facilitate risk management. The change of the long-established Thursday expiry to Tuesday will also serve liquidity in the market and match international conventions, since major exchanges in the world like European exchanges and several others worldwide have adopted a mid-week expiry.

Key Provisions of Circular 103/2025

1. Expiry Day Change

• SEBI has approved Tuesday as the new expiry day for equity derivatives, replacing the current Thursday convention.

2. Existing Contracts

• All live index and stock derivatives will continue to expire on Thursdays until further notice, except for long‑dated index options, which the Exchange will realign to Tuesday expiry in line with past practices and operational feasibility.

3. New Contracts

• Contracts expiring on or before August 31, 2025 will adhere to the existing Thursday expiry cycle.

• From September 1, 2025 onward, all newly introduced monthly derivatives will expire on the last Tuesday of each month. Weekly series (if any) will likewise adopt Tuesday expiries.

What Are Transitional & Implementation Guidelines By The NSE? 

• Effective Date: The revised expiry schedule for new contracts takes effect from September 1, 2025.

• Operational Readiness: Brokers and clearing members must update their order‑management systems, risk‑monitoring modules, and margin calculation engines to reflect the new Tuesday expiry. Particular attention should be paid to back‑testing automated trading algorithms against historical data adjusted for the expiry shift.

• Detailed Guidelines: A follow‑on circular will delineate cut‑off times, exercise procedures, and reporting templates to enable seamless adoption across all market participants.

What Are The Market Impact & Traders' Considerations? 

• Risk Management: Earlier expiry in the week may reduce settlement risk concentration and improve margin utilization by spreading contract rollovers more evenly.

• Liquidity Dynamics: Market makers are encouraged to provide two‑way quotes around the newly scheduled expiries to facilitate tighter spreads and uninterrupted contract roll‑overs.

• Portfolio Strategies: Trades should review hedge timings, especially around month‑end rebalancing, to adapt to the Tuesday‐centric expiry cycle.

Conclusion

By aligning final settlement days with SEBI’s directive, Circular 103/2025 reinforces the resilience and global compatibility of India’s equity derivatives market.Paying close attention to the transitional provisions will help the participants navigate through the transition between Thursday and Tuesday expiries with the aim of facilitating greater price discovery and risk management in the long term. Waiting until the new guidelines find their way, traders might start revising their strategy correspondingly.