From 7 December 2026, the last half hour of every expiry day will work differently. Are you ready?
SEBI has changed how the Indian stock market closes and how F&O contracts settle on expiry. The Closing Auction Session moves later and becomes shorter, F&O trading hours extend to 3:45 PM, expiring index contracts stop at 3:30 PM, and the final settlement price will be based on a 30-minute VWAP instead of the auction close.
This guide explains each change in simple words, what it means for Nifty and Bank Nifty option traders, and how to adjust your expiry-day routine. If expiry mechanics are new to you, first read our option chain analysis guide.
What Changes on 7 December 2026
| Item | Until 6 December | From 7 December |
|---|---|---|
| Regular trading, CAS stocks | Until 3:15 PM | Until 3:30 PM |
| Regular trading, other stocks | Until 3:30 PM | Until 3:30 PM |
| Closing Auction Session | 3:15 to 3:35 PM (20 min) | 3:30 to 3:40 PM (10 min) |
| Index and stock F&O | Until 3:40 PM | Until 3:45 PM |
| Expiring index contracts on expiry day | Until 3:40 PM | Stop at 3:30 PM |
| F&O final settlement price | CAS closing price | VWAP of 3:00 to 3:30 PM |
These details are taken from broker summaries of the SEBI circular, including this Zerodha bulletin. Always confirm the exact rules in the official circular on the SEBI website and with your broker.
The New 30-Minute VWAP Settlement
VWAP, or volume-weighted average price, is the average price of all trades in a period, weighted by how much traded at each price. From 7 December, the final settlement price of expiring index and stock F&O contracts will use the VWAP of the last 30 minutes of regular trading, from 3:00 PM to 3:30 PM. For index contracts, the settlement value is built from the VWAPs of the index’s constituent stocks. Our guide to anchored VWAP explains how VWAP is calculated.
Why It Matters
- A single large order near the close has much less effect on the settlement price.
- The settlement price can differ from the last traded price at 3:30 PM, because it averages the whole window.
- Option positions held into expiry settle on that average, so the 3:00 to 3:30 PM window becomes the key period to watch.
- Strategies that depended on a last-minute move in the closing price lose their edge.
The Shorter Closing Auction Session
The Closing Auction Session, introduced for F&O stocks earlier, collects orders after regular trading and matches them at one price to set a fair close. From 7 December it starts after regular trading ends and lasts 10 minutes instead of 20.
- 3:31 to 3:36 PM: market and limit orders are accepted.
- 3:36 PM onwards: only limit orders are accepted.
- The session closes at a random time between 3:38 and 3:40 PM, which discourages last-second order games.
Use limit orders in the auction. Market orders in a thin auction can fill at prices you did not expect.
What It Means for Option Traders
Expiring Index Options Stop at 3:30 PM
On expiry day, you will not be able to trade expiring Nifty or Sensex contracts after 3:30 PM, even though other contracts trade until 3:45 PM. Plan exits before then. Expiry-day gamma is already high, so the last hour can move premiums fast. Our guides to option Greeks and gamma exposure explain why.
Option Sellers and Pinning
Sellers who hold short positions into expiry will settle on the 30-minute average, not on a single closing tick. Strike pinning near heavy open interest may still happen, but a sudden spike in the final minute matters less. Ideas like max pain should be read across the whole final half hour.
Option Buyers
Buyers hoping for a last-minute jump into the money need that move to hold across the window, not just at 3:29 PM. Decide early whether to hold to settlement or exit. Our comparison of option buying vs option selling covers the trade-offs.
Stock F&O
Stock futures and options trade until 3:45 PM on all days, including expiry days, and settle on the same 3:00 to 3:30 PM VWAP.
Your New Expiry-Day Checklist
- Check your broker’s auto square-off time. Many brokers close intraday positions before the exchange cut-off.
- Decide before 3:00 PM whether to hold any expiring position to settlement.
- Watch the 3:00 to 3:30 PM window, not only the last minutes.
- Keep size small on expiry day and define your loss first. See our risk management guide.
- Recheck costs. Expiry trades still pay brokerage and statutory charges. See trading charges in India.
Inside the CLBS Framework
At Metaverse Trading Academy, expiry-day risk is handled in the PM-CORE step of the CLBS V18 framework, where every trade is checked for timing, liquidity and risk before it is allowed. From 7 December, the 30-minute settlement window becomes part of that check. See the free CLBS V18 brochure, or explore our trading plans to practise in the live trading room.
Frequently Asked Questions
Regular trading in all stocks, including those in the Closing Auction Session (CAS), runs until 3:30 PM. The CAS moves to 3:30 to 3:40 PM and becomes 10 minutes long. Index and stock F&O trade until 3:45 PM, except expiring index contracts, which stop at 3:30 PM on expiry day. Expiry settlement prices are based on the 30-minute VWAP from 3:00 to 3:30 PM.
The final settlement price for expiring index and stock F&O contracts uses the volume-weighted average price of the last 30 minutes of regular trading, from 3:00 PM to 3:30 PM, instead of the closing auction price.
From 7 December 2026, expiring index F&O contracts stop trading at 3:30 PM on expiry day. Non-expiring index contracts can trade until 3:45 PM.
Stock F&O contracts can trade until 3:45 PM on all days, including expiry days. Their settlement price also uses the 3:00 to 3:30 PM VWAP.
The Closing Auction Session is a short auction after regular trading in which buy and sell orders are matched at a single price to set a fair closing price for eligible stocks. From 7 December it runs from 3:30 to 3:40 PM and closes at a random moment between 3:38 and 3:40 PM.
Using a 30-minute VWAP makes the settlement price harder to influence with a few trades near the close, because it averages all trading across half an hour. Check the official SEBI circular for the regulator's full reasoning.
Conclusion
From 7 December 2026, the market closes on a fairer footing: regular trading until 3:30 PM, a 10-minute closing auction, F&O until 3:45 PM, expiring index contracts until 3:30 PM, and settlement on a 30-minute VWAP. Update your expiry-day routine now, before the first expiry under the new rules.
This article is for education only. It is not investment advice. Rules can change, so always confirm details with the official SEBI and exchange circulars and your broker.
Want to trade expiry days with a professional process? Visit Metaverse Trading Academy and start learning live today.
Vikas Gahlot
NISM-certified trader, technical analyst, and founder of Metaverse Trading Academy. With more than 10 years of experience in stock market trading and technical analysis, I have trained over 10,000 students across India through online and offline trading programs focused on intraday trading, swing trading, futures & options, and risk management.
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