Sensex and Bankex F&O expiry days come around once a month and hold significant importance for traders.
Expiry means that Sensex and Bankex F&O lose their value as soon as the markets close for the day.
This brings about a frantic end to the contract’s life, as buyers and sellers play a tug of war to come out on top.
In this blog, we’ll walk you through the precise Sensex and Bankex F&O expiry days.
Sensex F&O Expiry Days
Sensex expiry is the day on which the index’s F&O contracts reach their conclusion, becoming worthless at the day’s close and thus determining whether a trader makes a profit or loss.
1. Sensex Futures Contracts Expiry
| Type | Expiry |
| Weekly | Every Friday |
| Monthly | Last Friday of the Month |
2. Sensex Options Contracts
| Type | Expiry |
| Weekly | Every Friday |
| Monthly | Last Friday of the Month |
| Quarterly | Last Friday of the Quarter |
| Semi-Annually | Last Friday of the 6th Month |
All of these contracts expire on a Friday, but if Friday is a trading holiday, the expiry falls on the preceding business day.
Bankex F&O Expiry Days
BSE Bankex expiry day is another crucial date in the financial calendar. This day marks the expiration of Futures and Options (F&O) contracts related to the BSE Bankex, which is the benchmark for the banking sector in India.
On this day, all open F&O positions tied to the Bankex are settled.
Effective October 16, 2023, the BSE has made a noteworthy change to the expiration date of BSE Bankex derivatives contracts.
In a special circular released for this purpose, it was officially announced that the expiration date, which was previously set on Fridays, has now been rescheduled to take place on Mondays.
This modification marks a significant shift in the trading schedule of BSE Bankex derivatives contracts.
1. Bankex Futures Contracts Expiry
| Type | Expiry |
| Weekly | Every Monday |
| Monthly | Last Monday of the Month |
2. Bankex Options Contracts
| Type | Expiry |
| Weekly | Every Monday |
| Monthly | Last Monday of the Month |
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Impact of Sensex and Bankex Expiry
Sensex and Bankex typically exhibit specific reactions on Futures and Options (F&O) expiry days. Here’s how they tend to respond:
1. Increased Volatility
On F&O expiry days, both Sensex and Bankex tend to become more volatile. As you trade, be prepared for larger price swings than usual.
This heightened volatility occurs because traders are closing out their F&O positions, leading to rapid market movements.
It’s essential to deploy effective risk management strategies and make informed decisions in response to this increased market turbulence.
2. Higher Trading Volume
On F&O expiry days, both Sensex and Bankex experience a surge in trading volume. You’ll notice a higher number of buy and sell orders.
This increased activity is due to traders actively managing their F&O positions, which can lead to more pronounced price movements and overall livelier trading sessions.
It’s essential to be prepared for the heightened activity and potential market fluctuations these days.
3. Intraday Reversals
Both Sensex expiry and Bankex expiry may have moments when their prices change direction multiple times within the same trading day.
This means you should be prepared for rapid intraday reversals, making it essential to closely monitor the market and adapt your day trading strategies swiftly to navigate these frequent shifts in price.
4. Last-Hour Fluctuations
The last hour of trading can be quite volatile for you. Traders rush to adjust or close their positions before contracts expire.
This rush can lead to sharp and sudden price movements in Sensex and Bankex, making it important for you to stay alert and potentially re-evaluate your trading decisions during this critical time to manage your investments effectively.
5. Sectoral Impact
You should pay special attention to Bankex due to its sector-specific nature. As it represents the banking industry, any significant events or news related to banks can impact Bankex more prominently.
This means that you need to keep a close eye on developments in the banking sector, as they can lead to distinct movements in the Bankex index, potentially affecting your investment decisions.
6. Correlation with Nifty
An index is nothing but a composition of stocks from the entire market or a specific sector.
Sensex, Bankex, and Nifty 50 are all indices that have a degree of overlap in their constituents.
Thus, both Sensex and Bankex may move in tandem with Nifty, which reflects the broader market sentiment.
This means that the direction and intensity of their movements can be influenced by how the overall market, represented by Nifty, is performing.
Keep a close eye on Nifty’s behavior, as it can give you insights into potential trends for Sensex and Bankex on those days.
Conclusion
Sensex and Bankex expiry days are critical events in the F&O market, marked by increased volatility and trading activity.
These events offer opportunities for you as a trader to capitalize on market movements.
As a trader, you should pay attention to any market events on expiry and decide on whether you wish to carry forward or square off the contracts.
