Context:
SEBI may revise the weekly expiry schedule of index options to fortnightly, limiting it to one expiry per fortnight, if its recent reforms fail to reduce the speculative surge in options trading volumes. This comes in the backdrop of the Jane Street order for alleged manipulation and the regulator’s ongoing effort to cool down over-heated index derivatives markets.
Why the Move is Being Considered
- High index options turnover continues despite prior curbs.
- SEBI’s 3 July interim order against US-based Jane Street for ₹4,844 crore market manipulation on options expiry day raised concerns about market integrity.
- Retail traders dominate index options, but 91% incurred net losses in FY25, similar to FY24, per SEBI’s Equity Derivatives Study (EDS).
Recent Measures by SEBI
- October 2023:
- Cut multiple weekly expiries to one per exchange.
- Increased contract size to ₹15–20 lakh (from ₹5–10 lakh).
- May 2025:
- Changed Open Interest (OI) computation to future-equivalent basis, reducing notional exposure leverage.
- Tightened position limits to cap risk exposure.
SEBI’s Plan Going Forward
- Monitor whether recent reforms reduce speculative volumes in coming weeks.
- If impact is marginal, may move to a single fortnightly expiry per benchmark index (Sensex, Nifty).
- Final decision to be taken after stakeholder consultations.
Mint
