Big Shift in Derivatives! SEBI Fixes F&O Expiry Days – Tuesday vs Thursday Showdown

India’s equity derivatives market is set for a structural shift. SEBI has officially fixed weekly F&O expiry change rules for all stock exchanges. In a circular issued on May 27, 2025, the regulator directed all exchanges to choose either Tuesday or Thursday as the fixed expiry day for their benchmark index options. The move is aimed at reducing confusion and enhancing liquidity efficiency. NSE, which currently runs its expiry on Thursdays, and BSE, which has its expiry on Tuesdays, must re-apply and confirm their preference by June 15, 2025.

Why Did SEBI Enforce a Fixed Weekly F&O Expiry System?

SEBI’s latest move stems from concerns over fragmented liquidity, overlapping expiries, and a lack of clarity among market participants. The March 27 consultation paper already hinted at this change, citing the need for regulatory consistency and market efficiency.

The new rules mandate that:

• Each exchange can offer only one benchmark index options contract with weekly expiry.

• The F&O expiry must fall on either Tuesday or Thursday—not both.

• All non-benchmark equity derivatives will expire in the last week of each month, following the chosen weekly expiry day.

So, if BSE chooses Tuesday, all monthly expiries will also fall on the last Tuesday of the month. This structure aims to create spacing between expiries, allowing traders to focus on one expiry at a time, which could boost volumes and reduce arbitrage inefficiencies.

Also Read: March 28-Breaking: SEBI Orders NSE to Maintain Current Expiry Schedule

What Does It Mean for Traders and Market Participants?

For active traders and institutions, this move is more than just a technical change. It directly impacts option writing strategies, calendar spreads, and risk management setups.

Here’s how:

• Traders will now need to adjust their hedging timelines.

• If both NSE and BSE select different expiry days (e.g., NSE = Thursday, BSE = Tuesday), it will open up new arbitrage opportunities across platforms.

• Portfolio managers may prefer platforms with predictable rollover periods, enhancing institutional participation.

This could also have a ripple effect on index volatility, especially during expiry weeks, as liquidity becomes more concentrated.

What Must NSE and BSE Do Before June 15?

SEBI has clearly asked all exchanges to:

• Reapply for their F&O expiry day—no automatic grandfathering allowed.

• Seek prior approval before changing expiry dates in the future.

This implies that NSE and BSE can no longer tweak their F&O expiry days on their own. Regulatory oversight will be tighter, ensuring a more transparent and standardised derivatives ecosystem.

Given that NSE leads with over 94% of F&O market share, it’s widely expected to stick with Thursday. BSE may continue with Tuesday to avoid a direct clash and to attract niche volume.

What Traders Should Do Now?

1. Mark your calendars for expiry changes post-June 15 announcements.

2. Keep an eye on volume shifts between NSE and BSE.

3. Re-strategize your positions around the new expiry cycle.

4. Watch for SEBI updates or clarifications—rules may tighten further.

In conclusion, SEBI’s weekly F&O expiry change is a welcome move that adds clarity and discipline to India’s derivatives market. For savvy traders, it also offers new opportunities in arbitrage and volatility plays. Stay alert, stay informed—and prepare your strategies well before the clock ticks down to June 15.

Also Read: Unlock IPO Wealth: Schloss & Aegis IPO Snapshot- Know Latest GMP & Subscription Status on Day 1

Disclaimer: The views and investment insights provided here are based on publicly available information and do not constitute financial advice. Readers are advised to conduct their own research or consult certified financial experts before making investment decisions.