Stock exchange NSE said on Tuesday that the weekly expiry of Nifty Bank derivative contracts — or futures and options contracts — will be moved to Fridays. Currently, the expiry of the banking index contracts is on Thursdays. 

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The first such expiry on a Friday, instead of a Thursday, will take place on July 14, NSE said in a circular. 

The bourse also said that the existing contracts with a Thursday expiry will be revised or postponed to Friday at the end of market hours on July 6.

For instance, a July 13 (Thursday) expiry will be postponed to the next day, July 14 (Friday), and an August 31 expiry (monthly) will be preponed to August 25 (Friday), according to NSE.  

NSE detailed the changes as follows:

Expiry day Current expiry day Revised expiry day
Weekly contracts Thursday of every week excluding the expiry week of the monthly contract All existing weekly contracts shall expiry on Friday every week
If Friday is a trading holiday, the expiry day is the previous trading day
Monthly & quarterly contracts Last Thursday of the expiry month All monthly contracts shall expiry on the last Friday of the respective contract month
If Friday is a trading holiday, the expiry day is the previous trading day
Source: NSE circular

Here are some of the other highlights, as laid out in the NSE circular:  

  • Any new contract created for trading on or after the end of day on July 6 will be created as per the revised expiry days (as mentioned in the table)
  • Members are requested to note that there is no other change in the existing Nifty Bank contracts specifications
  • The settlement schedule will be intimated separately by clearing corporations

Analysts say the move will aid traders' focus on the derivatives of both the Nifty and the Nifty Bank. 

EDITOR'S TAKE | What Anil Singhvi says on NSE's move to shift Nifty Bank expiry to Friday 

Zee Business Managing Editor Anil Singhvi said the move is positive from the perspective of risk management. 

"Friday is undoubtedly more suitable for the expiry as it limits the risk for the weekend ahead," the market wizard said. 

What other experts say

"The focus will now increase on Nifty on Thursdays and Nifty Bank on Fridays," Jay A Thakkar, Vice President and Head of Alternate Research at Sharekhan, told Zee Business. 

"About 98 per cent of the market volume in the derivatives segment is in options and only the remaining two per cent in futures (index and stock futures included). Out of that, 56 per cent is in Nifty Bank and 36 per cent in Nifty," he added.

Choice Broking's Sumeet Bagadia also believes it is a good move to shift the expiry day for the banking index.

"It (the move) will ease excessive momentum on the existing expiry day," said Bagadia, Executive Director at Choice Broking. He pointed out that it is "often difficult for traders to chase opportunities in both indices owing to limited focus and margin".

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