--- title: "What happens on expiry day | RupeeCase" description: "On expiry day an index contract stops trading and is settled in cash, so an in the money option pays its intrinsic value." source_url: "https://www.rupeecase.com/learn/questions/what-happens-on-expiry-day" --- Index options settle in cash on expiry day, at the index close until 7 Dec 2026 1. 1 Sep 2025**Tuesday expiry for NIFTY**NIFTY weekly and monthly contracts expire on Tuesday from this date. When the Tuesday is a trading holiday, expiry moves to the previous trading day. 2. 16 Jun 2026**Example: the 16 Jun 2026 weekly**Every strike out of the money at the close settled at zero. Every strike in the money settled at the gap to the close. 3. 3 Aug 2026**Closing auction in the cash market**SEBI's closing auction session starts in the cash market. The index close, which sets the final value of an expiring index contract, now takes in the auction. 4. 7 Dec 2026**Settlement method changes**The final value becomes the index worked out from the volume weighted average prices of its stocks over the last thirty minutes of continuous trading. Expiring index contracts stop trading at 3:30 pm. Dated rules and the 16 Jun 2026 example. The final value is the settlement value of the index, not a trade price. Source: NSE contract specifications; SEBI circulars of 26 May 2025, 16 Jan 2026 and 15 Oct 2026. As of 16 Oct 2026. Take the NIFTY weekly that expired on 16 Jun 2026, a Tuesday. An index option settles in cash, so no shares change hands. The exchange sets a final settlement value for the index, and each open contract is closed against it. That is the last day of the contract. For a call, the intrinsic value is how far the index is above the strike. For a put, it is how far the index is below the strike. An option with no intrinsic value at expiry has nothing left, because its time value has run out. A buyer of that option loses the premium paid. A seller keeps the premium. The 16 Jun 2026 file is dated, so anyone can check the rule against it. In NSE's end of day file for that day, every strike out of the money has a settle price of zero, and every strike in the money has a settle price equal to its gap to the index close. [The question on options that expire in or out of the money](/learn/questions/option-expires-itm-or-otm) shows the table. Costs and charges still apply. The buyer of an exercised option pays STT on its intrinsic value, and a seller faces extra margin on short index options that expire that day. Stock options work differently, because they are settled physically, with delivery of shares. The way the closing value is built changed on 3 Aug 2026 and changes again on 7 Dec 2026, as the timeline shows. This page explains the rules and does not decide what any position should do. **Before you trade.** Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. [Read the SEBI study](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) What happens on expiry day?On expiry day an index contract stops trading and is settled in cash, so an in the money option pays its intrinsic value and an out of the money one lapses at zero. The final index value is the index close for expiries before 7 Dec 2026, and from that date the index worked out from its stocks' volume weighted prices over the last thirty minutes. LGo deeper ## Where Learn teaches this. [Go deeperExpiry and settlement: cash, physical, exercise and STT8 min, Beginner](/learn/path-14/module-14-6-expiry-and-settlement)[Go deeperExpiry day: gamma, theta, settlement and the rules10 min, Intermediate](/learn/path-17/module-17-12-expiry-day) SSources ## Go to the source. 4 sources, SEBI the most cited The publisher of each source listed below. Source: Module undefined source list. 1. [NSE, equity derivatives contract specifications (expiry cycle, lot size, settlement)](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE 2. [SEBI circular on the expiry day for equity derivatives contracts (26 May 2025)](https://www.sebi.gov.in/legal/circulars/may-2025/final-settlement-day-expiry-day-for-equity-derivatives-contracts_94189.html) SEBI 3. [SEBI circular introducing the closing auction session in the cash market (16 Jan 2026)](https://www.sebi.gov.in/legal/circulars/jan-2026/introduction-of-closing-auction-session-cas-in-the-equity-cash-segment-and-certain-modifications-in-the-pre-open-auction-session_99122.html) SEBI 4. [SEBI circular on closing auction session, market timings and settlement for derivatives (15 Oct 2026)](https://www.sebi.gov.in/legal/circulars/oct-2026/review-of-certain-aspects-of-the-closing-auction-session-market-timings-and-settlement-methodology-for-derivatives-contracts_105293.html) SEBI ?Questions people ask ## Related questions. [QuestionWhy is Nifty expiry on Tuesday and Sensex on Thursday, and why no Bank Nifty weekly?Beginner](/learn/questions/expiry-days-nifty-sensex)[QuestionWhat happens if my option expires in the money or out of the money?Beginner](/learn/questions/option-expires-itm-or-otm)[QuestionDo expiry day setups like the 9:20 straddle or "hero zero" work?Intermediate, trap check](/learn/questions/expiry-day-strategies)[QuestionWhat is physical settlement in stock F&O?Intermediate](/learn/questions/physical-settlement-stock-fo)[QuestionWhat is STT on options and on exercise?Beginner](/learn/questions/stt-on-options) [All 130 questions](/learn/questions/) Explore next ## Go deeper on this question. * [QuestionWhat is the Nifty lot size now, and why did it change?A short answer with a dated chart](/learn/questions/nifty-lot-size) * [ToolOption payoff builderLegs on a dated Nifty chain, breakevens and charges](/learn/tools/payoff-builder) * [GlossaryInvesting glossary, 230 termsPlain word definitions, and the app’s own](/learn/glossary) Community ## Join my WhatsApp group. Scan the code, fillFill one short form, and join my WhatsApp group. Slides, sources, factsheets and the rebalance logs live there, and members join a daily Google Meet with me. New to RupeeCase? [Getting started](/getting-started) [See the terminal](/terminal) [Sign up for RupeeCase](https://invest.rupeecase.com/signup) [Join the WhatsApp group](https://forms.gle/C6HMtM1Z2GfeocQV7) [One form, one group](https://forms.gle/C6HMtM1Z2GfeocQV7)Scan with your phone camera Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.