Retail investors flock to weekly options despite regulatory curbs and losses
PTI last week, Sebi chairman Tuhin Kanta Pandey said that while the regulator has no concerns about the futures segment of the derivatives market, it remains watchful of speculative trading in short-dated options. Index options turnover has grown even as cash market activity has fallen despite the regulatory curbs.Combined average daily premium turnover (ADT) of index options such as Nifty and Sensex rose 5% even as combined cash market ADT dipped by almost 8% in the current fiscal through 9 March (FY26), from the same period a year ago.In absolute terms, index options' ADT rose to ₹67,143 crore from ₹63,828 crore in the period under review, while cash market ADT slipped to ₹1.12 trillion in the current fiscal (1 Apr 2025 -9 Mar 2026) from ₹1.22 trillion in FY25 (1 April 2024-7 Mar 2025).The rise in combined options turnover comes despite regulatory curbs such as limiting index options expiry to one per exchange from multiple earlier, and tripling contract sizes to ₹15-20 lakh from ₹5 -10 lakh, among other measures, since November 2024.The National Stock Exchange (NSE) offers weekly Nifty options every Tuesday while the BSE offers Sensex options every Thursday.Market analysts attributed the growth to volumes shifting from discontinued liquid weekly contracts on the NSE such as Bank Nifty, Midcap Nifty and Finnifty to Sensex options.Prior to November 2024, the NSE ran four liquid weeklies including Nifty while BSE's only liquid contract was the Sensex options contract.
Sebi rules resulted in discontinuation of all NSE's liquid sectoral indices, excluding its benchmark Nifty50.From four liquid indices, NSE was down to only one. BSE's Sensex, which was relaunched in May 2023, benefited from the shift of volumes from these
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