The battle for market share between the National Stock Exchange (NSE) and BSE Ltd is set to intensify after the market regulator formalized the expected changes in weekly index expiry.
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Any stock exchange can launch a single weekly expiry contract either on Tuesday or Thursday, according to the Securities and Exchange Board of India’s (Sebi’s) Monday circular on the settlement day of equity derivatives.
“Now that the circular has been issued, NSE would like to shift its Nifty weekly options expiry to Tuesday from Thursday,” said a person aware of the development. “A request to this effect has been made to the regulator.”
If NSE shifts the weekly expiry of Nifty options to Tuesday, it could have a major impact on the BSE unless it shifts its own expiry to Thursday.
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BSE had earlier shifted its weekly Sensex expiry to Tuesday from Friday to draw more traction to the contract. This change was made in January this year after Sebi directed exchanges to offer only one weekly options contract—rather than multiple weekly expiries—to rein in retail frenzy on expiry days.
Queries emailed to the NSE on the proposed shift in its weekly expiry day and the BSE on its possible strategy remained unanswered till press time.
While tightening norms for weekly expiries, Sebi allowed exchanges to choose any one day for all their weekly, monthly, quarterly and semi-annual options contract expiries.
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NSE had planned to move all its option expiries to Monday from 4 April. But pending Sebi’s regulatory circular, they maintained status quo, retaining the expiry of weekly options on Thursday.
Now that the circular has finally been issued, NSE is expected to formally request that Sebi shift its expiry to Tuesday. A mail was sent to Sebi on Monday and a formal letter for the shift is expected to be sent to Sebi on Tuesday, said the person quoted above.
A person aware of BSE’s position said the exchange would “discuss” the issue with the regulator if NSE “indeed” decides to shift its expiry.
BSE-listed shares could react on Tuesday as under the extant expiry date of every Tuesday, BSE’s volumes are distributed over three days—Friday, Monday and Tuesday. This will compress to two days if BSE shifts to Thursday, in which case it would see volume spread on Wednesday and Thursday only.
While a shift to Thursday could reduce BSE’s volumes in favour of NSE, a Tuesday allotment to NSE could increase its market share in index options by around 5%, said the person quoted earlier, citing the NSE letter to Sebi for a shift in expiry.
Whether the regulator approves the NSE’s shift is a matter of question.
The NSE’s equity options share (index and stocks) based on premium turnover, shrank to 87.4% in FY25 from 96.9% in FY24, with BSE capturing the rest through its Sensex options.
The Sebi circular also specifies that all other equity derivatives—including benchmark index futures, non-benchmark index derivatives and single-stock futures/options—must have at least a one-month tenor and will expire in the last week of the month, on the exchange’s chosen Tuesday or Thursday.
It also mandates that exchanges must seek prior approval from Sebi before changing their expiry day in the future. Exchanges have been asked to submit their proposed expiry day to Sebi by 15 June 2025, and along with clearing corporations, implement necessary changes to their systems and bylaws to adopt the new framework.
