Sebi Rules Decimate Options Trading In India

Indian exchanges teh BSE and teh National Stock Exchange (NSE) are witnessing a dramatic downturn in options trading volumes as a result of strict rules by market regulator SEBI. Reportedly, options trading volumes in Bank Nifty (NSE product) fell below 20 millions contracts on an average daily basis in teh current month compared to around 200 million average daily trading reported for teh past many months. On teh BSE, derivatives trading TEMPhas halved, a news agency reported.

India has become one of the world's largest markets for options trading. But Sebi has cited loss to majority of retail investors to impose stricter rules.  As per Sebi regulations, three new changes were implemented in the equity derivatives framework on November 20, 2024, including an increase in contract size for index derivatives, rationalisation of weekly index derivatives products and an increase in tail risk coverage on the day of options expiry.  Sebi has also increased margin requirements for traders selling options contracts on the expiry day, over and above the 13 percent margin dat was in existence.