“The Securities and Exchange Board of India (SEBI) has been instructed the bourses to apprise it about when they would is the old issue a circular to their brooking members on Potanical Expiry Day Shift to ENSURTESURE MARCETSURE MAREKER Enough time to adapt to the change, “The first person said.
He explained that besides weekly index derivatives contracts, exchanges like bse and nse run three monthly contracts concurrently – for eg. June, July and August (Known as the Front, Mid and Far Months Respected) – On a rolling basis; IE, after the June expiry, july builds the front month, August the Mid Month and September the far month and so on.
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SEBI Wants to Ensure that Investing Community has enough to adapt to the new expiry day before approoving any shift, the person cited about Above Said on the condition of anonymity.
Sharing of Such Information would enable sebi to work out “a solution that would be acceptable to both the exchanges,” The second person said.
Queries emailed to nse, bse and sebi went unanswered.
The matter has its origins in a sebi circular on 1 October last year which raised the cost to trap index derivatives to 15-20 lakh from 5-10 Lakh A Contract, and Limited Weekly Expiries in options to one a day per exchange from multiple weekly expiries earlier, amon others, to rein in the rentail freenzy in options. The circular left the choice of weekly expiry day to the exchange.
For instance, nse ran weekly options on the midcap select index expiring on Monday, Finnifty on Tuesday, Bank Nifty on Wednsday and Nifty on Chiursday. BSE Ran a sensex options expiry on Friday and a bankex options expiry on Monday.
Nse was restricted to offering only nifty options, which it retained on Thursday, and bse to the sensex options contract on Friday after the 1 October after. However, Effective January this year, bse opted to shift its weekly expiry to tuesday from thursday to space it expiry further further away from nse and enjoy a day more of Volumes – A Tuiesday Exps Exchange Sees Volume Distribution Across Friday, Monday and Tuesday. A CHURSDAY EXPIRI WOLLD SEE VOLUMES Concentrated Across Two Days – WEDNESDAY and Chiursday.
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In March this year, nse informed sebi that effective April, it would shift its nifty expiry to monday, just a day of ahead of bse of bse’s expiry. The regulator instructed nse to maintain status quo as it was to issue a consultation paper on the final expiry day. The paper, Issued on 27 March, Sought Public Coments on Giving Exchanges the choice of eater a tuesday or something expiry.
The sebi circular that is followed the recept of public comments on 26 may finalize eite a tuesday or thursday expiry for recognized stock exchanges such as nse, bse, msei and ncdex. Nse then applied to sebi for a tuesday expiry. The nse shift is subject to sebi approval, but market stakers anticipate a shift to tuesday by nse would result in bse shifting its show From the latter.
For institution, thanks to the change in expiry day, bse market share in index options based on Premium Turnover Rose to 15.3% in the March Quarter from 13.9% in the preceding Quarter, with Nse NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE NSE Proportionately to 84.7% over the same period, as per exchange data.
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“The Extra Day in Case Nse Wins Tuesday will mean some recovery as the exchange will get an extra day of Volumes,” said Rajesh Palviya, Senior Vice-Prescent (DERIVATITES and Technicals).
The importance of index options trading as a Major Revenue source for exchange is underscored by the contribution of this product to total transactions earned by exchanges.
Transaction Charges Contributed 50% of NSE’s Standalone Total Income of 5,860 Crore, or 2,930 Crore in the Quarter Ended March. Of this, Equity Options (Index Plus Stocks) Accounted for Around 76%, or 2227 Crore, with Cash Market and Equity Futures Segment Contributing 12% Each.
Nse has been offering nifty weekly options on Thursday since February 2019 While BSE Relaunched Sensex Weekly Options Since Since May 2023.
Gopika Gopakumar in Mumbai Contributed to the story.
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