To counter BSE’s move of tweaking the lot size and expiry day of options contracts which had gained popularity due to low charges, NSE has shifted the Bank Nifty expiry to Friday from Thursday.

In a circular, the exchange said the change will be effective July 14and accordingly, all existing contracts with Thursday expiry will be revised to Friday on July 6. “The first Friday expiry will be on July 14,” the NSE circular added.

BSE had recently relaunched Sensex and Bankex derivatives contracts, signalling a sustained and growing interest from market participants.

What the change means

“From the investor-trader’s perspective, one of the critical points of consideration is volume, and NSE is still placed much better in market share than the BSE, and hence, is most likely to continue its dominance. Secondly, the volatility, particularly in Nifty, is expected to come down by roughly 20-22 per cent as the components of Bank Nifty will be more active on Friday’s expiry than Thursday’s weekly expiry. At the same time, the monthly expiry, which includes stocks of Bank Nifty, will be settled last Thursday. Hence, there are chances of more or less muted monthly Bank Nifty expiry,” said Rajesh Palviya, SVP - Technical and Derivatives Research, Axis Securities.

Mukesh Kochar , National Head - Wealth , AUM Capital Market Pvt Ltd, said the NSE move has come after BSE started settling its weekly contracts on Friday. “If we look at the broader picture, NSE does continuous settlement from Tuesday to Thursday for their different contracts. Nifty Finance on Tuesday, Nifty Midcap on Wednesday, Nifty 50 on Thursday and now Bank Nifty shifted to Friday. So investors will have the opportunity to play different themes across with different expiries.”

Generally, investors avoid trading exposure on weekend and from that prospective, Friday settlement is a good thought to get into the entire week, he added.

Santosh Meena, Head of Research, Swastika Investmart Ltd, said the NSE’s decision to shift the expiry of Bank Nifty to Friday can be viewed from two perspectives. First, BSE F&O contracts, which already expire on Friday, have gained popularity among traders due to lower charges compared to the NSE. Second, NSE’s previous successful experiment with the FinNifty’s new expiry day may have influenced this decision. “However, it’s important to note that expiry alone may not be the sole factor determining attractiveness; transaction charges will also play a significant role, especially considering the appeal of BSE Sensex F&O contracts,” he said.