Impact of revision of Weekly Index Future & options settlement cycle

In its latest circular, the NSE has announced changes to the settlement cycles of weekly options contracts on some of the key indices. Currently, the NSE offers weekly F&O contracts trading on 4 indices viz. Nifty 50 index, Bank Nifty index, Nifty Financial Services index and the Nifty Mid-Cap 50 index. Now SEBI, vide it latest circular will make some contract cycle changes to the following index weekly contracts.

Changes to the Nifty-50 Weekly Contract (NIFTY)

This pertains to the introduction of Weekly Options contracts on NIFTY 50 index. In its latest circular, the exchange has announced that the availability of weekly expiry options contracts on NIFTY index shall be reduced from 7 weekly expiration contracts to 4 consecutive weekly expiration contracts. This would be effective from 09th December 2022. However, this will not include the monthly expiry contracts.

Here is how the Nifty shift will be managed:

    a) All existing weekly expiries will continue to be available till their respective expiry dates or their maturity dates without any modifications. 

    b) However, as per the circular, no new weekly expiries (excluding monthly expiry) will be introduced by the exchange on the Nifty between December 09th, 2022 and January 05th, 2023.

    c) With effect from January 06th 2023 onwards, there shall be only 4 consecutive weekly expiries available, but this would be excluding the monthly expiries available for trading. The exchange has confirmed that there would be no other change in the F&O contracts of Nifty weekly settlements.

Changes to the Nifty Financial Services Weekly Contract (FINNIFTY)

This pertains to the introduction of Weekly Options contracts on FINNIFTY index. In its latest circular, the exchange has announced that the availability of weekly expiry options contracts on the FINNIFTY index shall be reduced from 7 weekly expiration contracts to 4 consecutive weekly expiration contracts. This would be effective from 07th December 2022. However, this will not include the monthly expiry contracts.

Here is how the FINNIFTY shift will be managed:

    d) All existing weekly expiries will continue to be available till their respective expiry dates or their maturity dates without any modifications. 

    e) However, as per the circular, no new weekly expiries (excluding monthly expiry) will be introduced by the exchange on the Nifty between December 07th, 2022 and January 03rd 2023.

    f) With effect from January 04th 2023 onwards, there shall be only 4 consecutive weekly expiries available, but this would be excluding the monthly expiries available for trading. The exchange has confirmed that there would be no other change in the F&O contracts of Nifty weekly settlements.

Changes to the Nifty Midcap Select Contract (MIDCPNIFTY)

This pertains to the introduction of Weekly Options contracts on Nifty Midcap Select index. In its latest circular, the exchange has announced that the availability of weekly expiry options contracts on Nifty Midcap Select index shall be reduced from 7 weekly expiration contracts to 4 consecutive weekly expiration contracts. This would be effective from 07th December 2022. However, this will not include the monthly expiry contracts.

Here is how the MIDCPNIFTY shift will be managed:

    g) All existing weekly expiries will continue to be available till their respective expiry dates or their maturity dates without any modifications. 

    h) However, as per the circular, no new weekly expiries (excluding monthly expiry) will be introduced by the exchange on the Nifty between December 07th, 2022 and January 03rd 2023.

    i) With effect from January 04th 2023 onwards, there shall be only 4 consecutive weekly expiries available, but this would be excluding the monthly expiries available for trading. The exchange has confirmed that there would be no other change in the F&O contracts of Nifty weekly settlements.
It may be recollected that Bank Nifty has already moved to 4 weekly options contract back in March 2022 itself.