Expiry Day Dynamics

Expiry day is the final reckoning. It's when "Time Value" hits zero and all OTM options worthless. This creates chaos, opportunity, and danger.

Weekly vs Monthly Expiry

• Nifty 50: The ONLY index with Weekly Expiry (Every Tuesday).
• BankNifty: Monthly Expiry only (Last Tuesday of the month).
• FinNifty: Monthly Expiry only (Last Tuesday of the month).
• *Note: Weekly contracts for BankNifty/FinNifty were discontinued in Nov 2024 as per SEBI mandate.

The "Zero" Phenomenon

At 3:30 PM on Expiry day, the value of any option is purely its Intrinsic Value.

If Nifty closes at 22,000:
The 22,100 Call (OTM) will become 0.
The 21,900 Call (ITM) will be worth exactly 100.

The "Gamma Blast" (Hero Zero)

After 2:00 PM on expiry day, premiums are very low (e.g., ₹10 or ₹20). If the market makes a sudden move of 50 points, these ₹10 premiums can jump to ₹50 or ₹60 in minutes.

This is called a Gamma Blast. It's highly profitable but extremely risky because if the move doesn't happen, the premium goes to 0 guaranteed.

Trader Strategy: Never deploy your full capital on expiry day afternoon trades. The probability of "Zero" is 90%, the probability of "Hero" is 10%.

Settlement

In India, stock options are physically settled (you have to buy the shares), but Index Options (Nifty/BankNifty) are Cash Settled. The profit/loss is simply credited/debited from your ledger.