Weekly vs Monthly Expiry Options: Updated Indian Market Guide

What changed: expiry day is no longer Thursday for NSE

For years, almost every options trader in India learned one simple rule: index options expire on Thursday. That rule is now outdated. Following a SEBI review of the booming weekly options market, the regulator standardised expiry days so that each exchange runs its derivatives on a single, fixed weekday. Under the framework that took effect through 2025, the National Stock Exchange (NSE) settled on Tuesday and the Bombay Stock Exchange (BSE) settled on Thursday. Each exchange is allowed only one weekly expiry product, built on its benchmark index.

In plain terms: if you trade Nifty weekly options on NSE, your contract now expires on a Tuesday. If you trade Sensex weekly options on BSE, your contract expires on a Thursday. The two flagship index weeklies therefore land on different days of the week, which actually spreads expiry-day volatility across the week instead of bunching it all on Thursday.

This matters because so much trading content, and many older brokers' help pages, still say Thursday for everything. Acting on that stale information can leave you holding a position one day longer or shorter than you intended, which on a high-theta weekly option is the difference between a profit and a near total loss of premium. Treat the exchange's official expiry calendar as the single source of truth, especially around festivals and exchange holidays, when expiry shifts to the previous trading day.

Why SEBI rationalised weekly expiries

Between 2019 and 2024, India became the largest derivatives market in the world by number of contracts traded, and a huge share of that was retail traders buying cheap, far out-of-the-money weekly options that expired worthless. With multiple indices each having their own weekly expiry, there was effectively an expiry almost every single trading day of the week. SEBI's own studies found that the large majority of individual F&O traders were losing money, and that expiry-day speculation was a major driver of those losses.

To cool the froth without banning the product, SEBI made two structural changes. First, it limited each exchange to one weekly expiry contract, tied to a single benchmark index. Second, it raised the minimum contract value and tightened margins, which pushed lot sizes and per-trade capital higher. The combined effect is fewer expiry events per week and a higher bar to enter, which is meant to reduce reckless gambling while keeping genuine hedging and trading intact.

• One weekly index expiry per exchange instead of one almost every day.
• Weekly options retained only on the benchmark index: Nifty on NSE, Sensex on BSE.
• Bank Nifty, FinNifty and Midcap Nifty weekly options discontinued, leaving only their monthly contracts.
• Higher minimum contract value and stricter expiry-day margins to curb over-leverage.
• A single fixed expiry weekday per exchange to make the schedule predictable.

Which instruments still have weekly options

This is the part most outdated guides get wrong. After November 2024, weekly options survive only on Nifty (NSE) and Sensex (BSE). The popular Bank Nifty weekly, which used to be one of the most heavily traded contracts in the country, no longer exists as a weekly. Bank Nifty, FinNifty and Nifty Midcap Select now trade only as monthly contracts. Individual stock options such as Reliance, HDFC Bank, TCS or Infosys have always been monthly only, with no weekly expiry at all.

Weekly vs monthly: how the mechanics actually differ

A weekly option is simply an option with about one to five trading days of life left when it is the front contract. A monthly option can have anywhere up to roughly a month of life. Both are settled in cash on Indian index options, meaning no shares change hands; the exchange credits or debits the difference between the strike and the closing index level for in-the-money options.

The single biggest practical difference is time decay, known as theta. A weekly option loses its time value very quickly, and that decay accelerates sharply in the final two days. This is great if you are a net seller of options collecting premium, and brutal if you are a buyer holding through the weekend or into expiry day. Monthly options decay more slowly day to day, giving a directional view more room to play out before theta eats the premium.

The second difference is the cost of vega, or sensitivity to implied volatility. Monthly options carry more time value, so they are more expensive in absolute rupees and react more to changes in implied volatility. Weekly options are cheaper to buy outright but punish you faster if the move does not come quickly. Neither is universally better; they suit different time horizons and different risk appetites.

A worked example: buying a Nifty weekly call

Let us use illustrative numbers to make this concrete. These figures are examples only and are not a prediction or a promise of returns. Suppose Nifty is trading at 24,000 on a Friday, and the weekly contract expires the coming Tuesday. You expect a bounce, so you buy one lot of the 24,100 call. The Nifty lot size is 65, and the premium is 80 points.

Your cost to enter is 80 points multiplied by 75, which is Rs 6,000 of premium, plus brokerage and statutory charges. Now say Nifty rallies and on Tuesday expiry it closes at 24,300. Your 24,100 call is in the money by 200 points, so it settles at an intrinsic value of 200 points. The contract value at exit is 200 multiplied by 75, which is Rs 15,000.

Gross profit before costs is Rs 15,000 minus Rs 6,000, which is Rs 9,000 on a Rs 6,000 outlay. Now subtract realistic costs. STT on options is charged at 0.1 percent on the sell-side premium for a normal exit, but if you let an in-the-money option get exercised at expiry, STT is charged at 0.125 percent on the intrinsic settlement value, which is far larger. On Rs 15,000 of intrinsic value that is roughly Rs 19 of STT, plus a discount brokerage of about Rs 20 per leg, exchange transaction charges, GST and stamp duty, together a few tens of rupees. After costs you keep a little under Rs 8,900. The lesson: square off in-the-money options before expiry rather than letting them be exercised, to avoid the higher STT on intrinsic value.

A worked example: a monthly Bank Nifty hedge

Because Bank Nifty no longer has weeklies, a hedger now uses its monthly contract. Suppose you hold a basket of banking stocks worth about Rs 9 lakh and Bank Nifty is at 51,000. You want protection for the month. The Bank Nifty lot size is 30, so one lot represents 51,000 multiplied by 15, which is Rs 7,65,000 of notional exposure, close to your basket. You buy one monthly 50,000 put for, illustratively, 300 points.

The put costs 300 multiplied by 15, which is Rs 4,500. If the banking sector falls and Bank Nifty closes the monthly expiry at 48,500, your 50,000 put is in the money by 1,500 points, worth 1,500 multiplied by 15, which is Rs 22,500. Your put gains about Rs 18,000 net of its cost, cushioning the fall in your stock basket. If banks instead rise, the put expires worthless and you lose only the Rs 4,500 premium, which is the cost of insurance. The slower monthly decay is what makes this hedge practical; a weekly put would have to be rolled four or five times in a month, multiplying cost and effort.

• Weekly buys suit a sharp, near-term view where you expect the move within a day or two.
• Monthly buys and hedges suit positional views and portfolio protection over weeks.
• Weekly selling captures fast theta but carries severe expiry-day gap risk.
• Monthly selling spreads theta income across a longer, calmer window.

Costs, STT and the expiry-day trap

Costs decide whether a weekly strategy is actually profitable, because weekly traders churn far more often. The big one is the Securities Transaction Tax (STT). For a normal buy then sell of an option, STT applies at 0.1 percent on the premium value of the sell leg. The trap is at expiry: if you let an in-the-money option lapse and it is exercised, STT is charged at 0.125 percent on the intrinsic value, not the small premium. On a deep in-the-money contract that can be a large, unexpected bill, occasionally larger than the profit on a barely in-the-money option.

On top of STT you pay exchange transaction charges, SEBI turnover fees, GST on brokerage and transaction charges, stamp duty on the buy side, and your broker's flat fee. With a discount broker the brokerage on options is typically a flat amount per executed order, often around Rs 20, regardless of lot size. For a weekly trader doing many round trips, these small charges compound into a meaningful drag, which is why over-trading the weekly is so dangerous.

• Square off in-the-money options before expiry to avoid the higher 0.125 percent STT on intrinsic value.
• Count brokerage, STT, exchange fees, GST and stamp duty before judging a strategy as profitable.
• Weekly churn multiplies fixed costs; fewer, higher-quality trades usually beat many small ones.
• Keep a trade-by-trade record so you can compute net profit and file taxes correctly.

How F&O profits are taxed in India

Many traders wrongly assume options profits are capital gains. They are not. Under Indian income tax rules, gains and losses from futures and options are treated as non-speculative business income. This means your net F&O profit is added to your other income and taxed at your applicable slab rate, whether you traded weekly or monthly contracts. The distinction between short-term and long-term does not apply to F&O at all.

For context, the capital gains rates that people often confuse this with apply to equity delivery, not F&O. On delivery-based equity, short-term capital gains (STCG) are taxed at 20 percent and long-term capital gains (LTCG) at 12.5 percent on gains above Rs 1.25 lakh in a financial year. Those rates are irrelevant to your options trading; they only matter if you also hold shares in your demat for delivery. Because F&O is business income, you can also set off losses and carry forward non-speculative business losses for up to eight years, and a tax audit may apply depending on turnover. Consult a qualified chartered accountant for your specific situation.

Choosing weekly or monthly for your style

There is no universally superior choice; the right expiry depends on your view, your capital and how much screen time you have. If you have a sharp, specific catalyst in mind, say an RBI policy outcome or an inflation print due in two days, a weekly contract lets you express that view cheaply and exit fast. If you are taking a positional bet on a trend over several weeks, or hedging a portfolio, the slower decay of a monthly contract is far more forgiving and needs less babysitting.

Beginners are usually better served starting with monthly contracts or, better still, with defined-risk spreads rather than naked weekly buying. The weekly market looks tempting because premiums are small, but the same small premium means the entire amount can vanish in a single quiet session. Whatever you choose, size each position so that a total loss of the premium is something your account can absorb, and never let one expiry-day bet threaten your capital.

• Trading a two-day catalyst with high conviction: a weekly contract fits.
• Holding a directional view for weeks, or hedging: a monthly contract fits.
• New to options: start monthly or with defined-risk spreads, not naked weekly buys.
• Always size so a full premium loss is survivable for your account.

Sources and further reading

Expiry days, lot sizes, STT rates and margin rules are set by the exchanges and the regulator and can change. Always verify the current contract specification before you trade using official sources such as the NSE Option Chain, NSE India, BSE India and SEBI. This article is educational and is not investment advice. Numbers shown are illustrative and are not a promise of returns.

Sources and Further Reading

For authoritative data and further reading on this topic, refer to NSE Option Chain, NSE India, SEBI (Securities and Exchange Board of India) and BSE India. Always confirm current rules, rates and contract specifications on the official source before you trade.