Expiry Day Trading Strategies: Profit from Weekly Options Expiry

What is This Strategy and Why It Works

Expiry day trading strategies focus on capitalizing on the unique dynamics of the Indian stock market on Tuesdays, when Nifty weekly options expire (monthly contracts expire on the last Tuesday of the month). This is a particularly volatile day, characterized by rapid price movements and increased trading volumes, particularly in the Nifty and Bank Nifty indices. Historically, traders have utilized this day to execute trades that exploit short-term price inefficiencies and heightened market activity. The strategy is rooted in the predictable patterns of market behavior as traders and institutions rush to settle contracts, leading to an increase in liquidity and volatility. This predictable volatility presents opportunities for traders to implement strategies that use both directional and non-directional approaches.

Here is a made-up example of this strategy. Suppose on an expiry day the Nifty index makes a significant intraday swing, opening at 25,200, dipping to 24,950 by mid-morning, and then rallying to close at 25,350. Traders who anticipated these movements through technical indicators and market sentiment analysis could have taken trades with defined risk, while those without a plan could have been stopped out in either direction. Such scenarios are driven by the unwinding of positions, adjustments of portfolios by institutional investors, and the closing out of options and futures contracts, which collectively contribute to the increased volatility observed on expiry days.

The effectiveness of expiry day strategies lies in their ability to exploit the 'pinning effect' and 'gamma squeeze'. The pinning effect occurs when an asset's price gravitates towards a particular strike price as the expiry approaches, due to the unwinding of options positions. A gamma squeeze, on the other hand, happens when option sellers are forced to hedge their positions as the underlying asset's price moves rapidly. These phenomena create distinct trading opportunities, especially for those using options strategies like straddles and strangles, which can benefit from large price swings.

• Nifty and Bank Nifty are particularly popular among traders due to their high liquidity and volatility on expiry days.
• Monitoring open interest data can provide insights into potential price movements as traders adjust their positions.
• Technical indicators such as Bollinger Bands, RSI, and moving averages are useful for identifying entry and exit points.

The Securities and Exchange Board of India (SEBI) plays a crucial role in regulating these markets to ensure fairness and transparency. Traders must be aware of SEBI's guidelines on margin requirements, position limits, and disclosure norms to operate within legal boundaries. For instance, SEBI's rule on maintaining a minimum margin for options trading ensures that traders have enough capital to manage their positions effectively, especially on highly volatile expiry days.

Which Contracts Expire on Which Day in 2026

Many older articles still say Thursday. The rule changed from 1 September 2025. On NSE, Nifty 50 has weekly options that expire every Tuesday, plus a monthly contract that expires on the last Tuesday of the month. Bank Nifty, Fin Nifty, Midcap Select, Nifty Next 50 and stock F&O have monthly expiry only, on the last Tuesday. So a plan built for weekly Bank Nifty expiry no longer matches the market.

On BSE, Sensex has weekly options on Thursdays and a monthly contract on the last Thursday. Bankex and Sensex 50 are monthly only, also on Thursday. Check the current NSE and BSE circulars before you plan a week, because exchanges can change these rules.

When a Holiday Moves the Expiry

If the expiry Tuesday is a trading holiday, the expiry moves to the previous trading day. In November 2026 the exchange holiday list has 10 November and 24 November, both Tuesdays. So the Nifty weekly expiry for those weeks falls on Monday 9 November and Monday 23 November. The standing rule stays the same (Tuesday); only those two dates move. Always read the expiry date on your broker option chain instead of counting weekdays.

A shifted expiry also shifts the whole week. Positions you planned to hold until Tuesday have one day less of time value, and the last-hour behaviour described below happens a day earlier.

Core Principles and Market Logic

Expiry Day Trading Strategies, particularly on Tuesdays in the Indian stock market, harness the unique set of circumstances and market psychology that surround the expiration of derivatives contracts. The final trading day for options and futures contracts can lead to heightened volatility and significant price movements, providing traders with opportunities to capitalize on these swings. Understanding the core principles and market logic behind these strategies is crucial for traders who want to maximize their profits while managing risks effectively.

One of the primary principles is the concept of 'time decay' or theta, which is especially pronounced on expiry day. As the expiration of options approaches, their time value diminishes rapidly. This accelerated decay creates opportunities for traders to implement strategies such as selling options to capture premium. For instance, suppose a trader sells a Nifty 50 call option with a strike price of 25,500 on the morning of an expiry day while the Nifty is at 25,200. If the market closes below this level, the option expires worthless, allowing the trader to keep the entire premium received. If the market rallies above the strike instead, the loss can be many times the premium, which is why sellers need strict stop losses.

Another critical factor is the 'pinning effect', where the market tends to gravitate towards certain strike prices where the highest open interest resides. This is often observed in both Nifty and Bank Nifty options. For example, suppose on an expiry day the Bank Nifty closes near the 56,000 mark, which is the strike price with the highest open interest for calls and puts. That would suggest that market participants, including large institutions, were positioning themselves around this level. This is a made-up example, and pinning does not happen every week.

• Time Decay: The accelerated decrease in options' time value as expiration approaches.
• Pinning Effect: Market prices gravitate towards strikes with highest open interest.
• Volatility Surge: Increased price fluctuations due to contract settlements and adjustments.

Volatility is another key aspect. Expiry days often witness sharp movements as participants adjust or square off their positions. This can be attributed to the unwinding of large positions and the realignment of portfolios, especially by institutional players. On some expiry days, for instance, the Nifty index can swing by 150 points or more within the last trading hour, reflecting the intense activity typical of expiry days. Check your own journal for how large the last-hour swings were on your past expiry days before you decide your position size.

Practical understanding of SEBI's regulations is vital, as changes in margin requirements or trading rules can impact strategies. For example, SEBI's mandate on increased margins for near-expiry contracts can affect liquidity and price behavior, necessitating careful planning and execution by traders.

Complete Entry Rules and Setup Criteria

In expiry day trading, particularly for the Indian stock market which sees heightened volatility on Tuesdays due to weekly options expiry, establishing a clear set of entry rules and setup criteria is crucial for success. Traders often focus on indices like Nifty 50 and Bank Nifty due to their liquidity and movement. Here's a comprehensive guide to setting up your trades effectively, ensuring you capitalize on the unique characteristics of these trading days.

To begin with, identify the market trend using a combination of moving averages. For instance, apply a 5-minute chart with a 20-period and 50-period exponential moving average (EMA). When the 20 EMA crosses above the 50 EMA, it signals a potential bullish trend, while a cross below suggests bearish tendencies. This basic setup acts as your foundational trend indicator.

Another crucial element is price action analysis. On expiration days, observe the first-hour range of Nifty or Bank Nifty. This is typically between 9:15 AM and 10:15 AM IST. Mark the high and low of this range. A breakout above the high indicates a potential long entry, while a breakdown below the low signifies a short entry.

For confirmation, use the Relative Strength Index (RSI) set to a 14-period on a 5-minute chart. An RSI reading above 70 can suggest overbought conditions, while below 30 indicates oversold conditions. In a bullish breakout, ensure the RSI is not in the overbought zone, and vice versa for bearish breakouts.

• EMA Crossover: Use 20-period and 50-period EMAs on a 5-minute chart.
• First-Hour Range: Identify the high and low between 9:15 AM and 10:15 AM IST.
• RSI Confirmation: Ensure RSI is not in overbought or oversold zones at entry.
• Volume Analysis: Confirm breakouts with increased volume, at least 20% higher than average.
• Candlestick Patterns: Look for bullish engulfing or bearish engulfing patterns at key levels.

Volume is another critical factor. On expiry days, a genuine breakout is usually accompanied by a surge in volume. Ensure that the breakout from the first-hour range is supported by at least a 20% increase in volume compared to the average 5-minute volume of the day. This provides additional confirmation that the move has strength behind it.

Candlestick patterns offer additional insights. For instance, a bullish engulfing pattern at the support level of the first-hour range can be a powerful signal for a long entry. Similarly, a bearish engulfing pattern at resistance can indicate a strong short entry signal.

Exit Strategy: Targets and Stop Losses

An effective exit strategy is critical for success in expiry day trading. Setting realistic profit targets and disciplined stop-loss levels ensures that you maximize your returns while minimizing potential losses. In the context of the Indian stock market, particularly with indices like Nifty and Bank Nifty, as well as heavyweight stocks such as Reliance Industries and TCS, traders must understand the volatility and price dynamics that characterize these securities on expiry days. This section delves into how to set these crucial parameters with precision.

Firstly, determining profit targets requires a blend of technical analysis and market sentiment assessment. For instance, if you are trading Nifty futures on an expiry day, it's pivotal to analyze previous expiry day price movements. Historically, in 2026, Nifty has shown a tendency to move within a 150 to 200 point range on expiry days. Hence, setting a profit target of 100 points could be a pragmatic approach, ensuring that your targets are achievable within the typical volatility range.

Stop losses are equally important to safeguard your capital against adverse movements. For Bank Nifty, which is known for its higher volatility compared to Nifty, a wider stop-loss range is advisable. For example, in the year 2026, Bank Nifty often exhibited intraday fluctuations of 300 to 400 points. Setting a stop loss at 150 points could provide a balance between risk management and trade viability. It's essential to adjust these levels based on the current market environment and volatility indices such as India VIX.

• Evaluate historical price ranges and volatility on expiry days.
• Set realistic profit targets based on technical analysis.
• Use volatility indices like India VIX to adjust stop-loss levels.
• Consider using trailing stop losses to lock in profits as the market moves in your favor.
• Regularly review and adjust your targets and stop losses in response to market conditions.

For individual stocks like Reliance Industries and TCS, which are heavily traded on expiry days, it's crucial to incorporate sectoral trends and news events into your exit strategy. For instance, in a week when Reliance Industries sees a surge in volatility due to a major policy announcement, adjusting your targets and stop losses to reflect increased volatility is prudent. A typical stop-loss strategy could involve setting stops at 2% below your entry point to prevent significant losses. Write the exit rule in your journal before the trade, so the news does not push you into a rushed decision.

Finally, it's crucial to establish criteria for exiting trades, not only based on reaching preset targets or stop losses but also in response to changing market conditions. For example, if a trade is nearing its expiry but the market sentiment shifts dramatically, it might be wiser to exit early to preserve capital or secure profits. Always consider the broader market context, including macroeconomic indicators and global events, which can heavily influence Indian markets on expiry days.

What an Expiry Day Trade Really Costs

Expiry day premiums are small, so costs take a big share of the gain. Since 1 April 2026, Securities Transaction Tax (STT) on options sold is 0.15% of the premium (it was 0.1% before). Here is a made-up example. You sell one lot of Nifty options (65 units) at a premium of ₹40. The premium value is 65 × 40 = ₹2,600. STT on that sale is 2,600 × 0.15% = ₹3.90. Brokerage, exchange charges, SEBI fees, stamp duty and GST come on top and depend on your broker.

If the premium falls from ₹40 to ₹30, the gross gain is 10 × 65 = ₹650. One STT line is small. The issue is that many expiry traders place a dozen or more such trades in a session, and every order carries a fee. Add up the charges for the whole day before you decide whether the day was profitable.

Option buyers do not pay STT when they sell before expiry, but an in-the-money option that is exercised at expiry attracts STT on the intrinsic value. This catches buyers who forget to square off a profitable option. Square off before the close if you do not want exercise.

Risk Management and Position Sizing

When engaging in expiry day trading strategies, particularly on Tuesdays when weekly Nifty options expire, effective risk management and position sizing are crucial. This ensures not only the preservation of capital but also the optimization of returns. The high volatility that typically accompanies these expiry days can lead to significant price swings in indices like Nifty and Bank Nifty, as well as in individual stocks such as Reliance Industries and TCS. Therefore, a disciplined approach to risk management and position sizing is essential for sustainable trading success.

A prudent starting point for risk management is to determine the maximum amount of capital you are willing to risk on a single trade. A common guideline among seasoned traders is to risk no more than 1-2% of your total trading capital on any one trade. For example, if your trading capital is ₹10,00,000, the risk per trade should be limited to ₹10,000 to ₹20,000. This helps in safeguarding your portfolio from substantial drawdowns while allowing you to stay in the game even after a series of losses.

Position sizing is another critical element. It involves determining the number of shares or contracts to trade based on your risk tolerance and the stop-loss level. Assume you are trading Nifty options with a stop loss of 50 points, equivalent to ₹3,250 per lot (since one lot of Nifty options is 65 units). If you decide to risk ₹13,000 on this trade, you can buy or sell four lots (₹13,000/₹3,250 = 4 lots). Proper position sizing ensures that your trades are aligned with your risk appetite and market conditions.

• Determine your risk per trade, ideally 1-2% of your total capital.
• Calculate position size based on stop-loss level and risk tolerance.
• Regularly review and adjust your risk parameters as your capital changes.

Portfolio management is also a key component of this strategy. Diversification across different instruments can help mitigate risk. For instance, instead of concentrating solely on Nifty options, consider allocating a portion of your capital to Bank Nifty or large-cap stocks like Reliance or TCS, which also exhibit significant movement on expiry days. This not only spreads risk but also provides multiple opportunities to capitalize on market volatility.

Additionally, it's vital to implement strong stop-loss mechanisms. A stop-loss order ensures that you exit a losing position at a predetermined price, preventing further losses. In the volatile environment of expiry day trading, stop-loss orders can act as a crucial safety net. For example, if you have entered a trade on Bank Nifty with an entry point of 44,000 and a stop loss set at 43,950, your loss is capped at 50 points per lot, preserving your capital for future trades.

Lastly, psychological discipline plays a pivotal role in risk management. Emotional trading can lead to over-leveraging and subsequent losses. It's imperative to stick to your predefined risk management rules, irrespective of market temptations. By maintaining discipline and adhering to your strategy, you can enhance the probability of achieving long-term trading success.

Real Trade Examples from Indian Markets

Expiry day trading in the Indian stock markets, particularly on indices like Nifty and Bank Nifty, can offer substantial opportunities for traders due to the volatility and liquidity. We explore some real trade examples from the Indian markets that illustrate how these strategies play out in actual scenarios. These examples not only highlight the potential of expiry day trading but also underscore the importance of disciplined execution of strategies.

Here is a made-up example. Suppose on an expiry day the Nifty is trading around 25,000, and a trader expects a volatile session because of an upcoming GDP data release. The trader buys a Nifty 25,000 Call option at ₹220 and a Nifty 25,000 Put option at ₹210 (a straddle), both expiring the same day. The total premium paid is ₹430. If the market reacts sharply and the Call surges to ₹350 while the Put falls to ₹120, the position is worth ₹470, a gain of ₹40 per unit before brokerage and taxes, which could eat a large part of it. If the session stays quiet, both premiums decay and the trader can lose the full ₹430 per unit. Keep position sizes small on expiry days, since option premiums can collapse within minutes.

In another made-up example, suppose Bank Nifty is trading at 56,000 on an expiry day. A trader notices a bullish pattern forming and decides to implement a Call Spread strategy. The trader buys a Bank Nifty 56,000 Call option at ₹320 and simultaneously sells a 56,200 Call option at ₹180, with the same expiry date. The net premium paid is ₹140. If Bank Nifty rallies to 56,300, the 56,000 Call might be worth ₹400 and the 56,200 Call ₹220, so the spread is worth ₹180 and the profit is ₹40 per unit before transaction costs. The most this spread can make is ₹60 per unit (the 200 point gap minus the ₹140 paid), and the most it can lose is the ₹140 paid.

Individual stocks also offer opportunities on expiry days. Consider a large stock such as Reliance Industries trading at ₹1,400 on an expiry day (the levels are made up), with significant open interest in the ₹1,380 and ₹1,420 strike prices. A trader who expects a breakout might use a Bull Call Spread, buying a ₹1,400 Call option at ₹25 and selling a ₹1,420 Call option at ₹12, for a net cost of ₹13 per share. If the stock moves up and the spread widens to ₹18, exiting would give a profit of ₹5 per share before costs, while the most the trader can lose is the ₹13 paid. This shows how spread strategies cap risk while still allowing a directional view.

• Monitor open interest and volume spikes for potential moves.
• use technical analysis to identify breakouts and trend reversals.
• Consider transaction costs and taxes as per SEBI regulations when calculating net profits.

Best Timeframes and Market Conditions

Expiry day trading in the Indian stock market, particularly with indices such as Nifty and Bank Nifty, can be highly profitable when approached with the right timing and under favorable market conditions. Understanding the nuances of these timeframes and conditions is crucial for maximizing gains and minimizing risks. The best timeframes for trading on expiry day typically occur during periods of heightened volatility, which are common during the first and last hours of the trading session. These periods often see increased trading volumes and price movements as traders adjust their positions before the contracts expire.

Market conditions play a significant role in determining the success of expiry day trades. Favorable conditions include clear directional trends and high liquidity. For example, when the Nifty index shows a strong upward trend due to positive economic data or earnings reports from major companies like Reliance Industries or TCS, traders can capitalize on this momentum. Conversely, markets characterized by erratic movements or low volume should be approached with caution. Traders should avoid trading during periods of uncertainty, such as around unexpected geopolitical events or major policy announcements, which can lead to unpredictable market behavior.

• Morning Session (9:15 AM - 11:00 AM): The initial trading hours often witness sharp movements as traders react to overnight global cues and domestic news. This period is ideal for capturing quick, profitable trades, especially if there is a clear trend.
• Afternoon Session (2:00 PM - 3:40 PM): The last hour of trading on expiry day is particularly volatile as traders rush to close or roll over positions. This can lead to significant price swings, offering opportunities for adept traders to exploit short-term market inefficiencies.
• Avoid Mid-Day Lull (11:30 AM - 1:30 PM): Trading volumes typically decrease during the mid-day session, leading to less predictable price movements. This is generally a time to avoid aggressive trading, as price action can be choppy and directionless.

Here is a made-up scenario. Suppose on a volatile expiry day the Nifty index opens at 25,100 and quickly moves to 25,250 by 11:00 AM, driven by strong earnings reports from IT giant TCS. Traders who identified this upward momentum early and entered call options could have gained by the afternoon, but traders who bought late could just as easily have lost as the premiums decayed. Similarly, suppose Bank Nifty, reacting to a favorable RBI policy announcement, surges from 56,000 to 56,500 in the last trading hour on another expiry day. This shows what can happen, not what will happen.

Common Mistakes and How to Avoid Them

Expiry day trading, especially in the Indian markets, can be highly profitable yet equally challenging due to the volatility and rapid price movements of indices like Nifty and Bank Nifty. Here, we examine some of the common pitfalls traders encounter and actionable strategies to avoid them. By understanding these mistakes, traders can enhance their decision-making process and improve their chances of success.

• Ignoring Market News and Events: Traders often overlook how macroeconomic announcements or corporate earnings can drastically influence market movements, especially on expiry days. For example, a surprise rate cut by the RBI can send the Nifty up by 150 points or more within minutes. To avoid being caught off-guard, always keep an eye on major announcements scheduled for the day. Expiry day moves can be sharp in either direction, so check the event calendar on the evening before and reduce your size on busy days.
• Overleveraging Positions: The allure of high returns can tempt traders to take excessively large positions. For example, a trader who overleverages on Bank Nifty options can face a significant loss if the index drops 300 points unexpectedly in a single session. Traders should adhere to SEBI's guidelines on margin requirements and ensure their position sizes align with their risk management strategies.
• Neglecting to Adjust Stop Losses: Market conditions can change rapidly on expiry days. A rigid stop loss might not accommodate sudden market shifts. For example, on a day of heightened volatility due to geopolitical tensions, many stop-losses can be triggered at once. Use trailing stop losses to protect profits while allowing for flexibility. Many stops hit together can push prices further, so keep your trailing distance wide enough to avoid being shaken out by a brief spike.
• Failure to Monitor Liquidity: Low liquidity can lead to slippage, especially in less traded options. For example, traders can face significant slippage on out-of-the-money stock options that trade rarely. Prioritize trading in highly liquid contracts and review the bid-ask spread before executing trades. Illiquid contracts may have wide gaps between buy and sell prices, so check the open interest and spread before placing an order.
• Emotional Trading: Expiry day volatility can induce emotional decision-making, such as panic selling or overtrading. For example, a sudden downturn can trigger panic-induced selling in stock options, which may then rebound. Traders should maintain discipline and adhere to their pre-defined trading plans. Selling in panic can lock in a loss before a rebound, so write your exit rules before the day starts and follow them.

By addressing these common mistakes, traders can significantly improve their performance on expiry days. Remember that preparation is key: stay informed about market news, manage your risk prudently, and keep emotions in check. With a disciplined approach and sound strategy, expiry day trading can become a rewarding endeavor.

Expiry Day Timing in 2026

From 3 August 2026, equity derivatives close at 3:40 PM (NSE circular NSE/FAOP/74467), not 3:30 PM. Cash market stocks follow their own timings. When you plan your last-hour exit, use the derivatives close and keep a few minutes spare, because spreads widen and orders can queue.

A simple routine is to write three times before the open: the earliest time you will enter, the time you stop taking new trades, and the time you must be flat. Whatever times you pick, decide them before the session, not during it.

Should You Trade Every Expiry?

No rule says you must. Some expiry sessions stay in a narrow range with no clean setup, and skipping them is a valid decision. Long option buyers need a real move, because both time decay and gamma work against a price that stays flat. Option sellers can lose far more than the premium collected if the index jumps, so stop-loss rules and margin buffers matter.

A useful test is your own record. Count how many of your last 20 expiry trades followed your written plan, and how many were impulse trades after a loss. If the plan trades made money and the impulse trades lost it, the fix is to take fewer trades, not to find a new indicator.

Advanced Variations and Optimizations

Expiry Day trading strategies in the Indian stock market, particularly those focusing on Nifty and Bank Nifty, present a unique opportunity for traders to capitalize on the high volatility and liquidity. As seasoned traders know, the Tuesday of every week is a crucial day for options expiry on the NSE's Nifty 50 index. By employing advanced variations and optimizations to your trading strategies, you can improve how you manage risk. This section delves into specific adjustments and techniques, providing actionable ideas explained with made-up examples that you should test on your own data. The adjustments here are for ideas only, so replay them on past expiry days and compare the results with your usual approach.

One effective optimization involves the strategic use of straddles and strangles. For instance, suppose Nifty is trading at 25,000 on an expiry day. A trader could initiate a straddle by buying both a 25,000 call and a 25,000 put. The key to optimizing this strategy lies in monitoring the implied volatility (IV) and the time decay (theta) closely. On days with expected high volatility, such as during significant economic announcements or geopolitical events, traders can adjust their positions to strangles by choosing strikes further away from the spot price, thereby capturing larger moves in either direction.

Another advanced technique is the adjustment of position sizing based on volatility forecasts. During periods of low anticipated volatility, reducing position size can help manage risk exposure. Conversely, when high volatility is expected, increasing position size can optimize returns. For example, on July 25, 2026, during the quarterly results announcement of Reliance Industries, a trader could have increased their position size in anticipation of a significant price move due to the expected volatility spike.

• Implement a dynamic stop-loss mechanism based on ATR (Average True Range) to accommodate market fluctuations.
• use options Greeks, particularly delta and gamma, to fine-tune positions in real-time.
• Incorporate market sentiment analysis and news flow to anticipate potential market moves.

In addition to these tactical adjustments, traders should also be aware of SEBI regulations, which can impact expiry day trading strategies. For instance, SEBI's margin framework mandates upfront margin requirements for derivatives trading. Being aware of these requirements allows traders to optimize their capital allocation effectively, ensuring they meet all regulatory standards while maximizing their trading potential.

Finally, consider leveraging algorithmic trading to automate your strategies. By setting specific conditions and parameters, algorithms can execute trades faster and more efficiently than manual trading, especially during the fast-paced expiry day sessions. In 2026, several traders successfully implemented algorithms that adjusted their positions based on real-time data feeds and market conditions, significantly enhancing their trading outcomes.

advanced variations and optimizations in expiry day trading strategies can significantly enhance a trader's ability to profit in the Indian stock markets. By employing these techniques, while adhering to SEBI regulations, traders can not only improve their trading performance but also manage risks more effectively. Whether through strategic use of options, dynamic position sizing, or leveraging technology, these advanced methods offer a pathway to becoming a more proficient trader on expiry days.

Backtesting Results and Performance Metrics

Backtesting is an essential step in validating any trading strategy, particularly for expiry day trading strategies which are inherently volatile. In this section, we explain how you can backtest expiry day ideas yourself on historical data of the Indian stock markets, focusing on popular indices like Nifty and Bank Nifty, as well as major stocks like Reliance Industries and TCS. We do not publish any real backtest results here, and the figures below are only made-up examples to show what to measure. Test across different market conditions, including trending, falling and sideways periods, before trusting any result.

For the Nifty index, a simple test could involve entering trades at 9:30 AM and exiting by 3:00 PM on every expiry day, using a straddle or strangle options strategy. For each test you would record the average weekly return, the maximum drawdown (the biggest fall from a peak in your account) and the win rate. As an illustration only, imagine a made-up sample where the average weekly return is 1.5%, the maximum drawdown is 5% and the win rate is 75%. These are not real results and should not be read as a promise.

For Bank Nifty, a more volatile index, a test would normally show wider swings in both returns and drawdown. As a made-up illustration, imagine an average return of 2% per week with a higher maximum drawdown of 8% and a win rate of about 70%. These are not real results. They highlight the importance of strong risk management strategies to mitigate potential losses, a crucial component of any trading plan. Run the test on your own data, with your own costs, before trusting any figure.

When testing individual stocks like Reliance Industries and TCS, the results will differ due to their unique volatility patterns. For example, a delta-neutral options approach on a stock might give a made-up average of 1.2% per week with a 65% win rate, while another stock might give 1.4% with a 68% win rate in the same imaginary sample. These numbers are illustrations only, not real results. They underline the necessity of tailoring and testing strategies for each security. Include brokerage, STT and other charges in every test, or the result will look better than it really is.

• Nifty Index: made-up example of 1.5% average weekly return and 75% win rate (not a real result)
• Bank Nifty: made-up example of 2% average weekly return and 70% win rate (not a real result)
• Reliance Industries: made-up example of 1.2% average weekly return and 65% win rate (not a real result)
• TCS: made-up example of 1.4% average weekly return and 68% win rate (not a real result)

Backtesting your own expiry day ideas shows whether a strategy has an edge after costs, while underscoring the importance of comprehensive risk management practices. By analyzing different scenarios and incorporating SEBI guidelines, traders can enhance their strategies' resilience and adaptability in various market environments. This approach aligns with regulatory standards, but past test results never guarantee future returns. Keep a journal of every live trade as well, so you can compare real results with your test.

How to Review Your Expiry Day Trades

Backtests show what a rule would have done. Your journal shows what you actually did. Both matter on expiry day, when speed pushes people to break their own rules. Record for each trade the entry time, stop, target, whether you followed the plan, and your mood after a loss.

A trading journal app such as OneTradeJournal lets you log each trade by hand with emotions, mistakes, plan deviation, stop, target and strategy, then see win rate, profit factor and time analysis. It does not import broker data and gives no signals, so the entries are yours. After a month, filter only the expiry day trades and compare them with other days.

• Did you enter before or after your cut-off time?
• Did you move or remove your stop?
• Did you trade again within ten minutes of a loss?
• What was the total charges figure for the day?

Frequently Asked Questions