On March 27, 2025, SEBI released a consultation paper proposing that all equity derivatives contracts on an exchange should expire only on either Tuesdays or Thursdays.
What’s the key reason behind this consultation paper?
According to SEBI, the following change is proposed for the following reasons:
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To ensure ideal spacing of expiry days, in order to reduce concentration risk and provide market stability.
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Additionally, to provide predictability and stability to market participants around the expiry days of equity derivatives contracts across exchanges.
Existing practice by NSE & BSE
- NSE recently proposed to change the final settlement day to Monday.
- BSE’s stock F&O contracts expire on the second Thursday of the month, whereas monthly index F&O contracts expire on the last Tuesday of the month.
SEBI’s rationale
Spacing out of expiry days through the week reduces concentration risk, and provides an opportunity for exchanges to offer product differentiation to market participants. At the same time, too many expiry days has the potential to revive expiry day hyperactivity which could jeopardize investor protection and market stability. It is therefore felt desirable to formalize the final settlement days for equity derivatives contracts across exchanges so that it gives predictability to market participants while avoiding any unwarranted shuffling of such days by the exchanges that may impact market integrity or orderly trading.
Translation: We are not comfortable with a single-day expiry for all contracts by both exchanges, and we don’t want it spread out too much like in the past, which increased speculation due to daily expiries. It’s better to limit it to two days—i.e., Tuesday and Thursday. We want you to fix it for once and let it remain. Don’t confuse the already confused traders 
SEBI’s proposals
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All contracts on an exchange must expire on either Tuesday or Thursday, to keep things spaced out and avoid using Monday or Friday as expiry days.
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Each exchange can continue offering one weekly benchmark index options contract on their chosen day (Tuesday or Thursday).
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All other contracts—including index futures, non-benchmark index options/futures, and single stock options/futures—must last at least one month and expire in the last week of the month on the chosen expiry day (Tuesday or Thursday).
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Exchanges must get SEBI’s approval before starting or changing any contract’s expiry or settlement day.
You cah read the full consultation paper here:
