Futures and options contracts come with an expiry date in the markets, before which the setllement needs to be completed, if traders want to avoid fines. Under the current rules, the expiry date for Bank Nifty is set at Thursday while the Bombay Stock Exchange has shifted Bankex to Friday.
Although the National Stock Exchange had earlier decided to follow in BSE's footsteps, it has now reversed its move and kept the expiry date on Thursday.
why does it matter?
This turnaround was a result of feedback that showed that NSE following BSE's move with Bank Nifty, could have an impact on Bankex derivatives.
Keeping the expiry dates for both on different dates can avoid concentration risk and ensure balanced market development.
NSE's decision to hold back will ensure higher participation for Bankex.
Expiry dates are also crucial to set the tone for the market as the settlement of derivatives determines the market sentiment for the week that follows.