NSE to Discontinue BANKNIFTY Weekly Options: What Traders Need to Know

Markets Discussions
1

NSE has announced some major changes that will affect all of us who actively trade in weekly options, especially for those in BANKNIFTY, MIDCPNIFTY, and FINNIFTY.

Here’s a summary of what it means for traders:

  1. Discontinuation Date: The weekly derivatives contracts for BANKNIFTY, MIDCPNIFTY, and FINNIFTY will cease to be available for trading after their respective last expiry dates:
  • BANKNIFTY: Last expiry on November 13, 2024.
  • MIDCPNIFTY: Last expiry on November 18, 2024.
  • FINNIFTY: Last expiry on November 19, 2024.
  1. Impact on Trading: After the specified expiry dates, no new weekly options contracts will be generated for these indices. This means traders will not be able to trade in weekly options for these indices after these dates.

Moving forward, the NSE will continue to offer weekly index derivatives only on the Nifty 50 Index. This change aligns with SEBI’s directive to strengthen investor protection and market stability by limiting the availability of weekly expiry contracts to one benchmark index per exchange.

For a detailed report you can refer here.

Members, what strategies do you plan to switch to once BANKNIFTY weekly options expire?

2

Yes, this is as anticipated.

SEBI circular clearly mentioned “Benchmark index”.

Banknifty = Sectoral index
Nifty50 = Benchmark index

Everyone who love banknifty will still trade monthly expiry banknifty ‘everyday’. It’s just that premium will be very-very high.

3

Would BankNity remain volatile or Nifty after this?

4

Well BankNifty and Nifty both have an history of being traded on exchanges even when there was no weekly expiry.

From volumes perspective, I thought it would have made sense for Bank Nifty to be weekly on NSE, and Sensex for BSE.

5

Strategy won’t change for me. I will just switch from BN weekly options to futures for my intraday trend following system.

6

Yes. Even I expected BN Weekly to sustain, a ‘Benchmark Index’ can be a ‘Broad Index’ like Nifty or a ‘Sectoral Index’ like BN, just depends on what is being benchmarked :wink: - and one could also argue Banks too describe the status of the broader economy, plus BN is the money spinner for NSE.

Judging by the delay in announcement, this wasnt an easy decision for NSE, perhaps took a nudge from Sebi. I wanted BN. This isnt ideal for me.

7

Just In: Weekly Options are removed in Domestic Exchanges, but now NSEIX planning to pick up all the days of the week to launch weekly expiries on its IFSC Exchange.

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8

But retail cannot trade this right :sweat_smile:

9

Strange are the ways :joy: They stopped us from trading Bank Nifty weekly and yet they want foreign based traders to enjoy the fruits of weekly contracts. They think we are inferiors who needs protection :smile:

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@t7support @thetribaltrader Yes it’s not meant for retailers (Resident Indians to be precise).

PS: There are some visa consultants in Gandhinagar who have already started advertising on services of offering NRI Status which will allow applicant to trade on NSEIX. I am planning to visit one today and check what’s in the store :sweat_smile::sweat_smile:

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