Chapter 8 | 3 min read

Expiry and Lot Size

Introduction

Every option has two important contract details that beginners often ignore: the expiry date and the lot size. Knowing them helps you calculate your cost, risk and the time you have for your trade.

What is Expiry?

Expiry is the last day an option contract is valid. After expiry, the option no longer exists. If it has value, it is settled; if not, it becomes worthless.

Weekly and Monthly Expiry on NSE

  • Weekly options: under SEBI rules, each exchange offers weekly options on only one benchmark index. On NSE, this is Nifty 50. Nifty weekly options expire every Tuesday (since September 2025). They have very short lives and very fast time decay.
  • Monthly options: Nifty, Bank Nifty, other NSE indices and F&O stocks have monthly contracts that expire on the last Tuesday of the month. Bank Nifty no longer has weekly options.
  • Holidays: if the expiry day is a trading holiday, expiry moves to the previous trading day.

Expiry days are set by the exchange and SEBI and can change, so always check the contract details before trading.

What is Lot Size?

Options are traded in fixed quantities called lots. You cannot buy just 1 unit. The exchange decides the lot size for each index and stock and revises it from time to time to keep contract values within SEBI limits. For example, NSE reduced the Nifty lot size from 75 to 65 and the Bank Nifty lot size from 35 to 30 from the January 2026 series.

Calculating Cost (Illustrative)

  • Nifty call premium: Rs 120. Lot size: 65. Cost = 120 x 65 = Rs 7,800 per lot.
  • Stock call premium: Rs 18. Assumed lot size: 500. Cost = 18 x 500 = Rs 9,000 per lot.

Settlement on Expiry

  • Index options (Nifty, Bank Nifty): cash settled. If the option is in the money at expiry, the difference is paid in cash.
  • Stock options: physically settled. If you hold an in-the-money stock option at expiry, you may have to take or give delivery of the shares. This can need a very large amount of money.

Example: Physical Settlement Risk (Illustrative)

You buy one lot of a stock call (lot size 500, strike Rs 1,000) and forget to exit. At expiry, the stock is Rs 1,020. The call is in the money, so you may have to buy 500 shares at Rs 1,000 = Rs 5,00,000. If you do not have the funds, your broker may square off early or charge penalties. That is why most traders exit stock options before expiry day.

Choosing the Right Expiry

  • Very short expiries are cheap but decay fast. They need quick moves.
  • Longer expiries cost more but give your trade more time.
  • For short-term trades of a few days, many traders choose an expiry at least 2 to 3 weeks away.

Check Contract Details on GoPocket

Before placing any options order on the GoPocket app, check the expiry date and lot size shown for that contract. Calculate the total premium (premium x lot size) and make sure it fits your risk limit.

Key Takeaways

  • Nifty weekly options expire on Tuesdays; NSE monthly contracts expire on the last Tuesday.
  • Always calculate cost as premium x lot size. The Nifty lot size is currently 65.
  • Stock options are physically settled; exit before expiry if you do not want delivery.

Disclaimer: Lot sizes and expiry days are as per NSE at the time of writing and can change. Always verify the latest NSE circulars.