Indian equity benchmark Nifty50 is set to end the current month's derivative series about three percent higher — a second straight positive series — owing to FII inflows and falling crude oil prices with the participation of the heavyweight banking pack. This will make November a fifth positive series in 2022 — a year which saw the 50-scrip gauge shying away from scaling fresh record highs on multiple occasions from within inches of the October 2021 peak.

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Why does expiry matter?

The period closer to the expiry of a monthly series is typically marked with higher volatility owing to more intense activity as traders scramble to square off their positions.

In other words, higher activity in the derivative market — which comprises futures and options contracts — closer to the expiry day or the last Thursday of a trading month — creates ripples in the cash market as traders carry forward or square off their positions.

A derivative contract of either type is a financial contract whose value is derived from an underlying asset, say the price of a stock in the cash market. Derivative contracts, which typically leverage instruments, command a higher potential risk and reward.

What to expect this week

Dalal Street has about three more sessions in the current month's derivative series. As of Monday, the Nifty50 is up 570.7 points or 3.2 percent in the November series, which began on October 28.

The Nifty50 could fall some more and then bounce by the time of expiry on November 24, Deepak Jasani, Head of Retail Research at HDFC Securities, told CNBCTV18.com.

"The index has been correcting over the past three days but is close to support at 18,100. Market activity has been lacklustre with low volatility and VIX at a multi-month low... FIIs have been more on the long side, even in the futures market," he said.

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