BSE F&O Expiry Shift: The Exchange's Stock May Take A Hit—Here's Why
BSE could stand to lose market share in its largest revenue-generating segment after market regulator Securities and Exchange Board of India announced a change in expiry day for derivative contracts.
SEBI announced Thursday as the revised expiry day for BSE's derivative contracts, with NSE being allotted Tuesday.
The move could result in a 13% decline in index options' average daily premium for BSE, which could lead to an 8% cut in earnings estimates, Goldman Sachs said in a note dated June 16.
Income generated from facilitating index option trades make up for nearly 60% of revenues for BSE, per the global brokerage.
BSE's market share in index options stood at 41% on Tuesdays, with the second day of the week accounting for 24% of the total volume traded during the week, based on premium turnover.
With the revision in expiry day, this could come down to 8%, according to Goldman Sachs, but with the share on Thursday rising to 41%, which currently stands at 8%.
In October, the market regulator had released revised guidelines for rationalisation of index option contracts, limiting the number of weekly expiry of contracts to one per exchange.
As a result of this limitation, combined with the new expiry day, and a renewed focus in capturing India's booming derivatives market, BSE's market share in weekly options had grown to 24% in May 2025, based on average daily premium, according to a Goldman Sachs note.
But with the third revision in expiry day, BSE could stand to lose market share by 3 percentage points, which it had grown to 24% in May from near 0% in May 2023, per Goldman Sachs' analysis.
This is the third change in expiry day for BSE in recent history. In August 2023, India's oldest exchange had announced a shift in expiry day for Sensex contracts to Friday, which were later changed to Tuesday in November 2024.
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