Disclaimer: Options trading is considered extremely risky, 9 out of 10 traders incur a net loss, please trade responsibly. See the SEBI circular for more details
This article assumes that you are familiar with options basic, If you are starting with options, make sure to check out our option primer.
Every option contract has a pre determined date till which it is valid, like in above case, the contract is valid till end of the month. This date is called the expiry of the contract.
After the end of expiry the contracts are void and hence worthless. So you would typically see the premium of the contract decreasing as it nearing expiration.
Each options series have different expiry as defined by the exchanges.
Stock options expiry
The stock options expire once in the month at the last Thursday of the month, if the last Thursday is a holiday then the options expire on the trading day before the last Thursday.
Index Option expiry
There are three index options being traded in NSE today, NIFTY, BankNifty and FinNifty and they have different expiry days.
Nifty Option expiry
Nifty options expire every week on Thursday, if Thursday is a trading holiday then the options expire of Wednesday of that week.
Weekly expiry were introduced by NSE in 2019, before that Nifty option used to be monthly and used to expire on last Thursday of the month. This is the reason you would still find people using the term “monthly expiry” for nifty, which just means last week of the month expiry. Usually the “monthly expiry” is highly liquid where as the other weeks apart from current week have relatively low liquidity.
Bank Nifty Option expiry
Bank Nifty options expire as of now weekly on Thursday, however NSE has issued a circular that post 4th September, 2023, Bank Nifty options would expire on Wednesday instead of Thursday.
On June, 2023, NSE had issued directive to move bank nifty expiry to Friday instead of Thursday, which was recalled later, so its possible that by the time you read this, the expiries could be changed.
FinNifty Option expiry
FinNifty options expire on Tuesday of every week. If Tuesday is a holiday the the previous trading day would be considered expiry for the contract.
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