Option Expiry, from the ground up
Every option and futures contract has a finite life that ends on its expiry date. These pages explain that lifecycle in plain English — the expiry cycles, the last trading day, what settlement and assignment actually mean — grounded in how Nifty, Bank Nifty and Sensex contracts work today.
Option Expiry Basics: Expiry is the date a derivative contract ceases to exist. On expiry the option is either exercised (if in-the-money) and cash-settled against the settlement price, or it expires worthless (if out-of-the-money). Indian index options expire weekly and monthly on a fixed weekday set by the exchange, and are cash-settled.
What is Expiry?
FoundationExpiry is the fixed date on which an options or futures contract ceases to exist — after which an in-the-money option is exercised and settled, and a…
Weekly Expiry
Expiry cycleA weekly expiry option is a short-dated contract that expires every week on the exchange's designated expiry weekday — currently Tuesday for Nifty on…
Monthly Expiry
Expiry cycleA monthly expiry option expires on the last designated expiry weekday of its contract month — currently the last Tuesday for NSE contracts (Nifty, Ba…
Quarterly Expiry
Expiry cycleA quarterly expiry contract expires at the end of a calendar quarter — on the last expiry weekday of March, June, September or December — and, togeth…
Annual & Long-Dated Expiry
Expiry cycleAnnual and long-dated expiries are contracts that live for a year or several years — the closest Indian equivalent to global LEAPS — used almost enti…
Expiry Date
Key dateThe expiry date is the specific calendar day on which a derivative contract reaches the end of its life and is settled — the last day it can be trade…
Last Trading Day
Key dateThe last trading day is the final session in which a contract can be bought or sold — for Indian derivatives it is the expiry day itself, with tradin…
Settlement Day
Key dateSettlement day is when the financial outcome of an expired contract is finalised and funds (or shares) actually change hands — for cash-settled index…
Exercise vs Expiry
Core conceptExpiry is the date a contract ends, while exercise is the act of realising an in-the-money option's value — and in India, in-the-money options are ex…
Assignment
Core conceptAssignment is the process by which an option seller (writer) is required to fulfil the obligations of an option that a holder has exercised — the mir…