Context:
The Securities and Exchange Board of India (SEBI) has reported a sharp 20% decline in individual retail traders in the equity derivatives (Futures & Options) market, following its recent interventions aimed at curbing retail frenzy and mitigating financial risks.
Key Findings from SEBI’s Latest F&O Study
Retail Participation Drops Sharply
- Unique traders fell from 8.43 million to 6.77 million, a 20% decline.
- Turnover by individual traders dropped by 11%, from ₹62,700 crore to ₹56,000 crore.
- Sharpest decline (30%) was observed in traders with less than ₹10,000 turnover.
SEBI’s Regulatory Measures (Since November 2024)
- Raised contract size for weekly and monthly index derivatives.
- Limited weekly index derivative listings.
- Mandated upfront premium collection from options buyers.
- Abolished calendar spread benefit on expiry day.
These reforms were introduced in response to concerns about financial losses among retail participants and rising speculative trading.
