Every option has an expiry date. After it, the option no longer exists: it is either settled in cash or expires worthless. In India the expiry days are set by the exchanges within rules laid down by SEBI.
The expiry days
- NSE index options expire on Tuesday, BSE index options on Thursday.
- Only one index per exchange has weekly options: the Nifty 50 on NSE and the Sensex on BSE.
- Bank Nifty, FinNifty, Midcap Nifty, Nifty Next 50 and Bankex have monthly options only, expiring on the last Tuesday (NSE) or last Thursday (BSE) of the month.
- When the expiry day is a trading holiday, the contract expires on the previous trading day.
Our expiry calendar lists the next dates for every index with holiday shifts applied.
Why expiry day is different
- Time value disappears. On the last day an out-of-the-money option can lose most of what is left of its premium within hours.
- Prices move fast. Near expiry, small moves in the index change option prices sharply (high gamma), in both directions.
- Margins go up. Since 2024 brokers collect an extra margin from sellers of options expiring that day.
- Exercise carries STT. An in-the-money option left open to expiry is exercised automatically, and STT is charged on the settlement value, not just the premium.
Cheap is not the same as low risk
Options a day or two from expiry look cheap because little time is left for them to pay off. Buying many of them is a common way to lose the whole premium.
Examples use illustrative values, not current market data. This is general education, not investment advice.