The National Stock Exchange (NSE) on Thursday announced that starting November 20, 2024, the weekly derivative contracts for the Nifty Bank, Nifty Midcap and Nifty Financial Services will be discontinued and will be turned into monthly contracts.

This was done to comply with market regulator’s SEBI’s directive on rationalising weekly contracts. SEBI had directed limiting weekly expiries to one benchmark per index recently.

As a result, the Nifty 50 will be the only index available for weekly expiry contracts. The last Nifty Bank weekly contract will trade on November 13, while for the Midcap index and the Financial Services index, the last dates of their weekly contracts will be November 18 and November 19, 2024 respectively.

In a note dated July 31, IIFL Securities had highlighted that the Nifty Bank contributes to 50% of NSE option premium volumes and is NSE’s biggest contract. Across three expiries, the impact is seen at 60% of overall volumes.
The brokerage estimates the net impact of NSE’s full year volumes to be around 30% to 35%.

In an interaction with CNBC-TV18 earlier, Rajesh Baheti of Crossseas Capital Services had mentioned that opting for Nifty as weekly product would lead to a 35% to 40% drop in revenue for NSE, while opting for Nifty Bank as the weekly expiry would lead to 15% to 20% drop in revenue.

But is this move positive for NSE’s peer BSE?

BSE’s options tariffs are 7% lower compared to NSE and there is a possibility that the market share gains for BSE may accelerate.

Earlier this month, BSE had announced that the weekly index derivatives contracts on the Sensex 50 will be discontinued starting November 14, while those on the Bankex will be discontinued from November 18, 2024.

Shares of BSE are trading 1.7% higher at ₹4,287 having made an intraday high of ₹4,350. BSE shares had made a record high of ₹4,395. The stock is up 94% so far in 2024.