Retail F&O trades nonetheless excessive regardless of Sebi curbs; contemporary overview prone to reassess dangers
Sebi has noticed that people’ exercise in index choices throughout the derivatives section has not declined as a lot as anticipated and should take additional motion after a deeper overview, sources informed information company PTI.The capital markets regulator examined exercise between December 2024 and March 2025 and located that though there was a year-on-year drop, buying and selling ranges stay considerably greater than two years in the past.In November 2024, Sebi launched restrictions within the futures and choices (F&O) market focusing on excessive particular person exercise, following knowledge that confirmed over 90 per cent of particular person merchants had been incurring losses.In line with Sebi’s evaluation, the variety of people buying and selling in fairness derivatives fell 12 per cent year-on-year, however rose 77 per cent in comparison with the identical interval two years in the past (December 2022–March 2023).Index choices stay the first space of concern because of intense hypothesis, particularly on expiry days. Particular person trades in index choices had been discovered to be down 5 per cent on premium phrases and 16 per cent on notional phrases year-on-year. Nevertheless, in comparison with two years in the past, volumes are up 34 per cent on premium and 99 per cent on notional phrases.“Sebi will re-examine the buying and selling exercise of people in index choices from an investor safety and systemic stability perspective,” a supply mentioned.“It has been observed that regardless of the measures taken final 12 months to comprise speculative overtrading in index choices, significantly on expiry day, the exercise is excessive,” the supply added.“Sebi goes to proceed monitoring the exercise in index choices, and, if warranted, can be analyzing the feasibility of any additional actions on this regard,” the supply mentioned.Regardless of regulatory actions, India continues to guide globally in derivatives buying and selling volumes. The supply mentioned this progress have to be matched with stronger danger monitoring.“There’s a have to match the speedy progress with commensurate enhancements in danger monitoring,” the supply added.Sebi is engaged on refining the way it assesses publicity, reduces manipulation danger, and avoids unintended disruptions. The February session paper titled “Enhancing Buying and selling Comfort and Strengthening Danger Monitoring in Fairness Derivatives” emphasised that complete surveillance and enforcement ought to take priority over blanket rules.The paper proposed tighter controls on market focus dangers utilizing smarter surveillance instruments, as overly inflexible rules may hamper wholesome market-making.In line with the supply, public suggestions on the proposals was largely constructive, and a few strategies had been integrated into the ultimate plans.Place limits for index choices have been relaxed to Rs 1,500 crore on a web foundation and Rs 10,000 crore on a gross foundation, with no intraday cap, to help smoother buying and selling for members, the supply added.
