New Delhi, Sept. 29 -- Market participants should brace for heightened volatility in the second half of Tuesday's trading session as both weekly and monthly futures and options (F&O) contracts expire today. Nifty derivative contracts typically expire on the last Tuesday of every month. If the scheduled expiry day is a trading holiday, the expiry is moved to the preceding trading day.

The expiry of derivatives contracts is nothing new, but the closing auction session (CAS) is. CAS, introduced on 3 August this year, has led to unexpected price swings and market uncertainty, prompting the Securities and Exchange Board of India (Sebi) to propose a revamp of the settlement methodology for derivatives contracts.

On the expiry day of the Augus...