Despite 1.19% intra-day fall, BSE Ltd ends 1.4% up from previous close after expiry day change

NSE has revised the expiry day for its weekly and monthly derivatives contracts to Tuesday, while the BSE announced that its contracts will expire on Thursdays starting 1 September, as per separate circulars issued by both exchanges.

The shift marks a major realignment in India’s index derivatives market and could significantly affect trading patterns and exchange-wise market share, especially in index options. While NSE currently dominates Thursday expiries, the move now pits both exchanges directly against each other on their strongest trading days.

Shares of BSE Ltd experienced volatility on Wednesday, following a significant 5 per cent pre-market drop. In the afternoon, the shares were down 1.3 per cent, trading at Rs 2,629.30.  As the markets closed, the stock price had recovered to Rs 2,836.20, indicating a 1.40 per cent increase from the previous close.

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Until now, BSE’s index options contracts expired on Tuesdays, giving it a strategic advantage on that day, where it commanded around 40 per cent of market share. On Thursdays, however, NSE held a dominant 92 per cent share, compared to BSE’s 8 per cent. With both exchanges now switching expiry days, direct competition is set to escalate.

BSE Market share

Goldman Sachs expects BSE’s overall index options market share to decline in the short term, potentially falling from 24 per cent to around 21 per cent after the change takes effect on 1 September. The brokerage estimates that BSE may take six to seven months to recover the lost 3 per cent market share.

Despite the short-term hit, the long-term outlook remains steady. Goldman Sachs has maintained its EPS estimates for FY27 and FY28, while trimming its FY26 EPS forecast by 2 per cent, citing temporary disruptions due to the expiry reshuffle.

BSE has been steadily gaining share in the index derivatives segment since October 2023, when it introduced refreshed contracts. From the September low, the exchange is projected to gain about 0.5 percentage points in market share per month, supported by its focus on new client acquisition and longer-dated expiries.

Currently, BSE holds about 6 per cent share in the cash market. While that remains stable, the real battleground continues to be the high-growth index options space, where both exchanges are now clearly doubling down.