Weekly Expiry
Weekly expiry refers to futures and options contracts that expire every week — typically on Thursday on the NSE — as opposed to monthly contracts that expire once at the end of each calendar month, providing traders with shorter-duration derivative instruments for tactical and hedging strategies.
NSE introduced weekly options on the Nifty 50 index in February 2019 and subsequently extended the product to Bank Nifty, providing Indian derivatives traders with contracts that expired every Thursday. Before the introduction of weekly expiries, the nearest available options expiry was always the last Thursday of the month, meaning options could have up to four weeks of remaining life. Weekly options allowed traders to take highly targeted views on events that were scheduled within days — corporate earnings releases, RBI monetary policy announcements, Union Budget day, or scheduled global risk events.
The popularity of weekly expiry contracts in India grew explosively after their introduction. By 2022–2023, weekly Nifty options volumes had surpassed monthly options volumes, making India one of the most actively traded weekly options markets globally. The weekly expiry structure was particularly attractive to options sellers, who benefited from the rapid time decay (theta) that characterised short-dated options in the final days before expiry. For the same strike and premium, a weekly option decayed far more rapidly per day than a monthly option with several weeks of life remaining.
However, SEBI expressed concern about the proliferation of weekly expiry indices and the speculative activity they engendered among retail participants. In 2024, SEBI issued a consultation paper and subsequently tightened the framework for weekly expiry products, restricting weekly expiry contracts to a single benchmark index per exchange to reduce the fragmentation of speculative activity across multiple weekly expiry schedules.
The mechanics of weekly settlement were identical to monthly expiry: index options settled at the weighted average index value during the final thirty minutes of trading, and ITM options were automatically exercised. The primary difference was the much shorter remaining time value, which amplified the binary nature of near-expiry option outcomes.
For risk-management purposes, participants who used index options to hedge equity portfolios found weekly options particularly cost-effective as short-duration hedges ahead of known risk events. For pure speculators, the leverage embedded in low-premium, near-expiry options created the potential for very large multiples of the premium invested — but with correspondingly high probabilities of total loss of premium paid.