Reduction in Number of Weekly BANK NIFTY Contracts

5paisa Research Team 5paisa Research Team 9th December 2022 - 10:14 am

The National Stock Exchange has vide it circular dated 22nd December 2021 has decided to reduce the number of weekly option expiries from 7 consecutive expiries to 4 consecutive expiries. This will only be applicable to the pure weekly expiries and will not include the monthly F&O expiries. Let us understand this better with a table looking at the current expiries.

F&O Expiry Date	Nature of Expiry
23-Dec-2021	Weekly
30-Dec-2021	Weekly-cum-Monthly
06-Jan-2022	Weekly
13-Jan-2022	Weekly
20-Jan-2022	Weekly
27-Jan-2022	Weekly-cum-Monthly
03-Feb-2022	Weekly
10-Feb-2022	Weekly
17-Feb-2022	Weekly
24-Feb-2022	Weekly-cum-Monthly

As can be seen in the above table, at any point of time, there are 7 independent weekly expiries and 3 weekly-cum-monthly expiries for the BANKNIFTY. As per the NSE circular, these 7 independent weekly expiries will get compressed into just 4 consecutive weekly expiries.

How will this be rolled out for the Bank Nifty?

Here are some points to know about the rollout of the reduced expiries for the BANKNIFTY.

a) The reduction in weekly contracts from the current 7 contracts on the BANKNIFTY to 4 contracts on the BANKNIFTY will be effective from 21st January 2022. However, what about the existing contracts?

b) The exchange has laid out a systematic process for this shift in the BANKNIFTY from 7 expiries to 4 expiries. This will, ensure that the existing open contracts and the various positions on the BANKNIFTY will not get impacted.

c) As of today, all the existing weekly expiries will continue to be available for trading and fresh positions as well as closure of positions till their respective expiry dates and maturity dates.

d) However, between 21st January 2022 and 03rd March 2022 no fresh weekly expiries or even weekly-cum-monthly expiries will be introduced by the exchange. This will allow time to catch up with target of 4 expiries.

e) Effective from 04th March 2022, there will be automatically 4 consecutive contracts available for trading weekly options on the BANKNIFTY

How will the BANKNIFTY series look like on 21-Jan and 04-Mar?

There are 2 important cut-off dates viz. the day after 20th Jan expiry and the day after 03rd Mar expiry of BANKNIFTY. The table below captures the situation on 21st January 2022.

27-Jan-2022	Weekly-cum-Monthly
03-Feb-2022	Weekly
10-Feb-2022	Weekly
17-Feb-2022	Weekly
24-Feb-2022	Weekly-cum-Monthly
03-Mar-2022	Weekly
10-Mar-2022	Weekly
17-Mar-2022	Weekly
24-Mar-2022	Weekly

As can be seen from the above table, on 21-January, there will be 7 weekly contracts on the BANKNIFTY and 2 weekly-cum-monthly contracts. However, from 21st Jan till 03rd Mar, no fresh BANKNIFTY contracts will be added.

As a result, on 04-Mar there will be only 3 weekly contracts on 10-Mar, 17-Mar and 24-Mar. There will be the weekly cum monthly expiry on 31st Mar and a fresh weekly contract for 07th April will be added. From that point that cycle of 4 weekly contracts on the BANKNIFTY will continue.

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