NSE Circular on NIFTY Long-Dated Index Options

General
1

NSE has issued a circular informing market participants of an upcoming revision in the strike interval for NIFTY 50 long-dated (long-term) index options. This change is part of NSE’s periodic review of option contracts to ensure better liquidity and efficient market functioning.

What has changed?

The strike interval for NIFTY long-dated index options will be revised from 1000 points to 1500 points. The number of strikes available around the ATM level will remain unchanged (5 ITM, 1 ATM, 5 OTM)

Effective date: December 31, 2025

Why is NSE making this change?

Long-dated index options typically witness lower trading activity compared to weekly or monthly options. Several far-out-of-the-money strikes tend to remain illiquid over time.

As part of its semi-annual review, NSE evaluates:

  1. Trading activity and liquidity across strikes
  2. Open interest concentration
  3. Relevance of available strikes based on the current index level

By increasing the strike interval:

  • illiquid and inactive strikes are reduced
  • Liquidity gets concentrated in fewer, more meaningful strikes
  • Market depth and price discovery improve for long-dated contracts

This change aligns with NSE’s long-standing framework for managing long-term derivatives contracts.

Who is impacted?

NIFTY 50 long-dated index options
Traders holding or planning to trade far-month NIFTY option expiries
Members and systems that rely on the NSE FO contract master files

Weekly and regular monthly NIFTY options are not affected by this change.

Please refer to the attached NSE circular

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2

What will happen to existing open contracts, if not closed?

3

lol… on one side SEBI wants to promote long term derivative contracts, and on other side NSE is increasing the interval for long dated contracts…

circus continues

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Existing open contracts will not be impacted or force-closed.

Strikes with open interest will continue till expiry; only ineligible strikes with zero OI may be discontinued over time.

5

Hmm… I don’t get it.

1 ATM:
26000

5ITM PE(at 1500 intervals from ATM):
27500
29000
and so on…

So, what will happen to current 27000 and 28000PE?

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6

when non traders make decision about trading.

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• If they have Open Interest (OI > 0): They will continue to be available. Even if the rule says strikes should be at 1,500-point intervals (like 26,000, 27,500, 29,000), the exchange cannot simply delete a strike that people are currently holding. You will still be able to trade or close these positions.

• If they have ZERO Open Interest (OI = 0): They will be discontinued (disabled). The exchange cleans up the option chain to remove “clutter” and concentrate liquidity into the main 1,500-point interval strikes.

• New Strikes: No new strikes will be introduced at the 27,000 or 28,000 levels for these long-term expiries. Only the strikes fitting the 5-1-5 scheme (5 ITM, 1 ATM, 5 OTM) at the designated 1,500-point intervals will be created.

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