F&O expiry: Sebi sticks to Tuesdays or Thursdays

The Securities and Exchange Board of India (Sebi) has reinforced its decision to implement a two-day weekly expiry schedule for derivatives contracts, specifically on Tuesdays and Thursdays. This move is aimed at enhancing market efficiency and providing traders with more flexibility in managing their positions. By setting a fixed schedule for expiries, Sebi aims to reduce market volatility and improve liquidity, which could benefit both institutional and retail investors. Stock exchanges have been instructed to align their operations with this new structure, marking a shift from the traditional single-day expiry approach. The decision comes after extensive consultations with market participants, who generally supported the idea for its potential to streamline trading activities. Sebi believes that a predictable expiry pattern will help in better risk management and align with global best practices, thus boosting investor confidence in the Indian markets. While some traders have expressed concerns about the increased frequency potentially leading to higher transaction costs, Sebi remains confident that the overall benefits outweigh the drawbacks. The regulatory body is optimistic that the new expiry regime will lead to more strategic trading and risk assessment, ultimately strengthening the market's resilience. As the changes take effect, stakeholders will be closely watching the impact on trading volumes and market dynamics.

— Authored by Next24 Live