NSE Revises Major Changes in BANKNIFTY, FINNIFTY Expiry Days: Effective January 2025

NSE (National Stock Exchange) has announced significant changes to the expiry days for its BANKNIFTY, FINNIFTY, MIDCPNIFTY and NIFTYNXT50 derivatives contracts after BSE announced revised days for its SENSEX and BANKEX on November 28 2024.

NSE new expiry days will take effect from January 1, 2025. The new expiry days will reflect a shift in the last trading days for several key indices including BANKNIFY and FINNIFTY, it will going to impact both monthly and quarterly contracts.

Overview of Revised Expiry Days

The NSE's circular drafts specific changes to the expiry days of BANKNIFTY, FINNIFTY and MIDCPNIFTY derivatives contracts. The expiry day for BANKNIFTY monthly and quarterly contracts will shift from the last Wednesday to the last Thursday of the expiry month. Similar adjustments have been made for other indices as well; here is the table shows the changes in these indices expiry days:

These modifications are intended to align trading practices more closely with market dynamics and trader preferences.

Market Impact and Trading Implications

This standardization of expiry dates across major indices such as BANKNIFTY and FINNIFTY could lead to better liquidity management and potentially reduced volatility around expiry periods. The sudden moves that became so common on every expiry may somehow discomfort the options sellers, which causes them to square off their position on loss; these revised days might lead to reducing these sudden moves. This move also aligns with global market practices and could facilitate more efficient risk management for institutional investors. Traders and investors are advised to update their trading systems and strategies accordingly, particularly noting the special arrangements for holiday-affected expiry dates, such as the December 2025 BANKNIFTY quarterly expiry being preponed to December 24, 2025, due to the Christmas holiday.

Next Steps for Market Participants

All members of the NSE are hereby advised to familiarize themselves with the updated contract specifications as of January 1, 2025, with new expiry days of BANKNIFTY, FINNIFTY, MIDCPNIFTY and NIFTYNXT50. The circular goes on to state that all new contracts created after this date will follow the revised expiry days. In conclusion, these changes may somehow influence some traders to readjust and get comfortable with these new expiry days, while some may see this as a positive initiative and adapt quickly. It is, therefore, important that all participants in the derivatives market should participate and give feedback on these market developments.