Understanding Derivative Contract Expiry

Can I hold onto derivatives contracts indefinitely?

No, you can't hold onto derivatives contracts indefinitely. These contracts are time-bound and have specific expiry dates. They are valid only for a set duration and expire either on a weekly or monthly basis, depending on the type of derivatives.
  1. Equity derivatives: Futures and options on individual stocks or stock indices typically have both weekly and monthly expiries. For instance, while the monthly expiry for stock indices like Nifty & Bank Nifty is usually on the last Thursday of the month, there are also weekly expiries for options which might occur throughout the week. If any expiry day is a holiday, they expire on the previous trading day.
  2. Currency derivatives: Futures and options contracts on currency pairs also have weekly and monthly expiries. The exact day of the week for weekly expiries can vary, so it's essential to keep track of the specific currency pair's expiry calendar.
  3. Commodity derivatives: Futures and options contracts on commodities like gold, oil, and others have expiry patterns that differ depending on the specific commodity and contract.
We recommend keeping track of these expiry dates to avoid unexpected obligations or potential losses. Regularly review your positions and plan accordingly as the expiry date approaches.
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