What are Index Options? Lot Size & Expiry Days Explained
Index Options have grown exponentially in popularity in India. With instruments like NIFTY, BANKNIFTY, and FINNIFTY, retail and institutional traders now have powerful tools to speculate, hedge, or diversify their exposure. This blog unpacks everything you need to know about Index Options, their lot sizes, and expiry schedules. What Are Index Options? An Index Option is a derivative contract that draws value from the underlying index like the NIFTY 50, BANK NIFTY, among others. They are European-style options, which means the exercise can only be done at expiry, and since they are cash-settled, there is no actual exercise of shares. There are two types of index options: How Are Index Options Useful? Use Case Benefit Hedging Protect portfolio against downside in market crashes. Speculation Take directional bets on market trends with limited capital. Income Generation Use strategies like covered calls or iron condors. Portfolio Diversification Reduce dependence on individual stocks by trading entire market segments. For example, if you expect the banking sector to outperform in the short term, trading BANKNIFTY options can offer leveraged exposure without needing to buy multiple banking stocks. Current Index Options Lot Sizes (Jun–Aug 2025) Lot size refers to the minimum number of units you need to trade in an options contract. Index Symbol Lot Size (Jun 2025) Lot Size (Jul 2025) Lot Size (Aug 2025) NIFTY 50 NIFTY 75 75 75 BANK NIFTY BANKNIFTY 30 35 35 FINNIFTY FINNIFTY 65 65 65 MIDCPNIFTY MIDCPNIFTY 120 140 140 NIFTY NEXT 50 NIFTY NEXT 50 25 25 25 Note: Lot sizes can be revised quarterly by the NSE based on the price movement and liquidity of each index. Expiry Schedule – Weekly & Monthly Expiry refers to the date on which the option contract ceases to exist. Each index has weekly and monthly expiries, providing frequent opportunities to trade. Index Weekly Expiry Monthly Expiry NIFTY Thursday Last Thursday of the month BANKNIFTY Wednesday Last Wednesday of the month FINNIFTY Tuesday Last Tuesday of the month MIDCPNIFTY Monday Last Monday of the month NIFTYNEXT50 Friday Last Friday of the month SENSEX ❌ (only monthly) Last Thursday of the month BANKEX ❌ (only monthly) Last Thursday of the month 🛑 If the expiry day is a trading holiday, it will be preponed to the previous trading day. Why Are Lot Sizes Important? Key Features of Popular Index Options NIFTY 50 BANKNIFTY FINNIFTY MIDCAPNIFTY NIFTY NEXT 50 BSE Derivatives: SENSEX & BANKEX Index Weekly Expiry Monthly Expiry Lot Size SENSEX ❌ Last Thursday 15 BANKEX ❌ Last Thursday 20 BSE offers derivative contracts on SENSEX and BANKEX, but trading volumes are comparatively lower than NSE. These instruments are generally used by arbitrageurs or long-term hedgers. Strategy Example: Weekly Trading in Index Options If you’re a weekly trader, here’s how you can build a plan: Risk Factors to Consider Trading Tips Final Thoughts Index Options are powerful instruments in the hands of learned traders and investors. By understanding lot sizes, expiry days, and the characteristic features of each index, you will be in a position to frame a strategy that serves your financial goals. Whether you are: 👉 Index options can bring flexibility and depth to your trading portfolio.