Friday expiry in stock market, Indian F&O Markets?
When it comes to exchange-traded derivatives, Indian futures and options markets are among the most liquid in the world. The rising involvement of domestic institutional investors (DIIs), foreign institutional investors (FIIs), and, more recently, retail investors, can be blamed for this phenomena.
One of India's oldest exchanges, the BSE, started its own derivatives operations in recent years as a result of this increase in involvement. As a result, expiry choices are now available on Indian markets every day of the week. Institutions may efficiently hedge their positions thanks to this increased flexibility, which also lets private investors take advantage of opportunities to purchase or sell for quick profits.
As a result, traders will now have five expiry days every week, which will further increase the volume of options trading. Trading a variety of instruments on different days will enable traders to make the most use of their margin. For expiry-day traders who enjoy short-selling options on these days to benefit from theta decay, this new regime is incredibly profitable because such techniques can now be used all week long.
One of India's oldest exchanges, the BSE, started its own derivatives operations in recent years as a result of this increase in involvement. As a result, expiry choices are now available on Indian markets every day of the week. Institutions may efficiently hedge their positions thanks to this increased flexibility, which also lets private investors take advantage of opportunities to purchase or sell for quick profits.
As a result, traders will now have five expiry days every week, which will further increase the volume of options trading. Trading a variety of instruments on different days will enable traders to make the most use of their margin. For expiry-day traders who enjoy short-selling options on these days to benefit from theta decay, this new regime is incredibly profitable because such techniques can now be used all week long.
The expiration dates for a variety of tradable contracts are briefly reviewed in this article.
What is expiry day do You Know?
The Expiry Day that a F&O contract's buyers and sellers must settle their differences is known as the contract's expiry day. These contracts are physically settled after the expiration day, when the underlying security is delivered at the agreed-upon strike prices, or they are cash settled, when the buyers and sellers settle the difference in cash between the strike price and the price at which the underlying has expired.
All stock options and futures contracts are physically settled, meaning that the underlying security is delivered, in Indian marketplaces. Conversely, all index futures and options contracts have a cash settlement mechanism between the sellers and buyers.
All stock options and futures contracts are physically settled, meaning that the underlying security is delivered, in Indian marketplaces. Conversely, all index futures and options contracts have a cash settlement mechanism between the sellers and buyers.
What Is Out-of-the-Money (OTM) Options?
When an options contract expires out-of-the-money (OTM), it is worthless and loses all of its value. The option's premium is not refundable.
Conclusion:
Anyone dealing F&O contracts in India needs to be aware of expiry days. Recently, weekly expiry options have been introduced, giving Indian markets great flexibility in risk management and short-term opportunity capitalization.
You can trade more confidently and make well-informed judgments by being familiar with the precise expiry dates of the contracts you have selected.
You can trade more confidently and make well-informed judgments by being familiar with the precise expiry dates of the contracts you have selected.
