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The Bombay Stock Exchange (BSE) has announced a significant change to the expiry date for its single stock derivatives.
From July 2024, the expiry of monthly contracts of single stock derivatives is changed to the second Thursday of each month.
An important change from July 2024
Current contracts Final Expiry
BSE said the current existing monthly contracts for stock derivatives with last Thursday as expiry day will expire on June 28, 2024.
They “will be removed at the end of June 28, 2024, and will not be available for trading from Monday, July 01, 2024,” the BSE said in the circular.
Launching New Contracts:
The new stock derivative contracts from July 1st, 2024, with three serial monthly expiries will have the second Thursday of the month as the expiry day (if Thursday is a holiday then the previous working day).
These new contracts of the updated expiry schedule will be generated at the end of the day on June 28, 2024, and will be available for trading from July 1, 2024.
BSE further mentioned that these changes will only apply to the expiry day of monthly contracts of single stock derivatives, and there will be no changes in the expiry day of any other contracts in the equity derivatives segment.
Perception of this change
It is viewed that this change will make uniform expiry dates and possibly align them more closely with global market practices, although the BSE has not explicitly stated this as the reason.
Significant Effects on Traders and Investors
This change requires traders and investors to adjust their trading strategies, as this shift could influence trading behavior around the expiry dates.
As the final expiry under the old system approaches, traders and investors should review their strategies and ensure they are prepared for the new schedule starting in July 2024.