In a major regulatory development aimed at fostering greater market stability and enhancing investor protection, the Securities and Exchange Board of India (SEBI) has announced that all equity derivatives contracts will now expire only on Tuesdays or Thursdays. The new rule will take effect from June 15, 2025 and is seen as a decisive move to curb excessive volatility and speculative activity across India’s stock exchanges.
🔍 Why This Move Matters
Until now, the National Stock Exchange (NSE) hosted its derivatives expiry on Thursdays, while BSE Ltd chose Tuesdays. This led to heightened market activity on multiple days, drawing concerns about overlapping volatility, increased speculative pressure, and potential risks to retail investors.
SEBI’s latest circular aims to:
- Standardize weekly expiry dates across exchanges.
- Prevent market fragmentation.
- Enhance risk management and price discovery.
“This regulatory step will create more predictable and structured trading patterns while reducing stress on clearing systems and trading infrastructure,” said a SEBI spokesperson in a press note.
📎 Source: Reuters
📘 Key Guidelines Announced
According to SEBI’s official circular and supporting reports:
- ✅ Uniform Expiry Days: Weekly equity derivatives contracts must expire on either Tuesday or Thursday, based on the exchange’s choice.
- ✅ One Weekly Benchmark Option per Exchange: Each exchange can offer only one benchmark index option with a weekly expiry.
- ✅ Monthly Expiry for Other Derivatives: All other contracts like index futures, stock futures/options must have a minimum 1-month tenor and expire in the last week of the month on the exchange’s selected day.
- ✅ Prior SEBI Approval: Any future changes in expiry schedules by exchanges must receive prior approval from SEBI.
📎 Sources: Business Standard, Economic Times, Rediff Money, The Week
📈 What This Means for Traders & Investors
- Retail investors may benefit from reduced “expiry-day” swings, which are often exploited by high-frequency traders.
- Exchanges will face increased competition to attract liquidity on the chosen expiry day.
- Derivatives strategy planning will become more streamlined with fewer overlapping expiry dates.
Financial experts expect this move to lead to a healthier derivatives market while nudging exchanges toward more responsible product offerings.
🧠 Expert Take
“By limiting expiry days, SEBI is effectively curbing ‘expiry arbitrage’ and cooling off high-frequency volatility. It’s a smart, preventive regulation,”
— Anand Rathi, Market Analyst
⚠️ Disclaimer
This article is for informational purposes only. All views expressed are based on official data and reports available at the time of publication. Readers are advised to refer to SEBI’s official circular and consult financial professionals for personal investment decisions.
