Exploring The Critical Role of Expiry in Trading
In trading, expiry refers to the date a contract, like a futures or options contract, ceases to be valid and is no longer tradable. This date marks the final day for traders to settle their positions on the contract. Expiry dates are particularly important for options trading, as they signal the end of a contract's lifespan.
Key Points about Expiry in Trading:
Futures and Options Contracts:
Expiry dates are primarily associated with derivative contracts like futures and options.
Last Day of Trading:
The expiry date is the final day a contract can be traded.
Settlement or Exercise:
Traders must either settle their positions by exercising the contract or allow it to expire.
Volatility:
Expiry days often see heightened volatility as traders close or roll over positions, influencing prices.
Indian Stock Market:
For many instruments, the expiry date is typically the last Thursday of each month. However, specific exchanges like NSE have made changes to the expiry day for certain instruments
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