India’s market regulator, the Securities and Exchange Board of India (SEBI), is reportedly evaluating a series of sweeping changes to rein in the growing retail frenzy in the derivatives market. According to a Zee Business report, SEBI is considering curbing weekly options expiries, potentially moving to a fortnightly expiry cycle, alongside hiking margins and Securities Transaction Tax (STT) on options trading.
The move aims to reduce excessive speculation and protect retail investors, many of whom are increasingly participating in short-term, high-risk trades. Currently, index options expire every Tuesday for BSE’s Sensex and every Thursday for NSE’s Nifty. Under the new proposal, only one expiry may be allowed every two weeks, replacing the current weekly system.
Earlier in July, Mint had reported that SEBI was exploring a fortnightly system to ease the pressure of weekly trades that often lead to volatile spikes in market activity. The proposed increase in margin and STT on options could further deter speculative positions by making such trades costlier and risk-managed.
While no official circular has been issued, sources indicate that consultations are underway and the final decision may be announced in the coming weeks. These potential reforms mark a significant shift in SEBI’s regulatory approach towards retail participation in the fast-growing options segment.
