BSE Shares Drop 5% After Change in Derivatives Expiry Day

Image Source: Money Control

BSE Ltd shares fell over 5% intra-day, reacting sharply to a regulator-driven realignment in the equity derivatives expiry schedule that could impact the exchange's growing presence in the index options business.

SEBI has approved a new structure wherein the National Stock Exchange (NSE) will shift its weekly expiry day to Tuesdays, and BSE will shift to Thursdays from September 1, 2025. This change aims to reduce market volatility and avoid overlapping expiry dates on exchanges.

Market Reaction

BSE shares dipped to an intraday low of ₹2,500, down 6.2%, before paring some losses to close around ₹2,632, still below over 1%.
BSE's earnings estimates have been cut by Motilal Oswal and Goldman Sachs analysts due to a potential 350–400 basis point loss of market share in index options.
Apprehensions also exist due to reduced trading windows for BSE's Thursday expiries, which are expected to detrimentally affect trader participation compared to NSE's Tuesday cycle.

What's Changing?

NSE’s Tuesday expiry gives traders a longer window (Friday–Tuesday) to build positions and manage risk.
BSE’s Thursday expiry compresses strategy execution into just two trading days (Tuesday–Wednesday), potentially limiting volume and flexibility.

Broader Implications

While SEBI’s move is intended to standardize expiry schedules and curb speculative trading, it may tilt volume and liquidity in favor of NSE in the short term.
BSE's current Derivatives momentum, fueled by retail demand and innovative contracts, is under threat as participants rebalance strategies.

Sources: Moneycontrol, Business Upturn, Economic Times, Yahoo Finance