An expiry a day! BSE, NSE join forces to make daily derivative expiry a reality

Notwithstanding the fact that nine out of 10 individual futures and options (F&O) traders end up losing their capital, stock exchanges BSE and NSE have seen a sharp surge in retail derivative trading, supported by introduction of multiple index options.

Earlier, option traders used to focus only on Thursday as being the weekly option expiry for two key indices Nifty and Bank Nifty, but now every day is a weekly expiry day. Option buyers and sellers now have multiple options to choose from.

Here's how the derivative expiry calendar looks like now:

• Monday — Nifty MidCap Select
• Tuesday — Nifty Financial Services, also known as FinNifty
• Wednesday — Nifty Bank. Monthly and quarterly contracts of the banking index will continue to expire on Thursdays.
• Thursday — Nifty50
• Friday — BSE Sensex 30 and Bankex. BSE has decided to shift Bankex F&O expiry to Mondays from October 16.

“Weekly expiry for multiple indices provides more opportunities to option buyers to pay less premium and ride volatile moves during a particular day or week, while option sellers get the benefit of fast time decay in option premium due to small expiry cycles. Now, after Nifty and Bank Nifty, all other index options are quite familiar and traders are trading them actively but it requires a focused approach, more effort and better understanding to grab the opportunity to play the expiry on every day of the week,” said Chandan Taparia of Motilal Oswal.

With Nifty and Nifty Bank now expiring on different days, retail participation will increase further as traders can use the same capital or margin to trade Bank Nifty on Wednesday and Nifty on Thursday.

“Participants can use the volatility of a particular day and hedging at less cost also can be done. Due to