Derivatives overhaul proposal tanks markets: What's the reason
Indian stock markets dropped sharply on Wednesday, with the BSE down 3.2%, as investors reacted to SEBI's plans to shake up how derivatives trading works.
The proposed changes could seriously impact how people trade options and futures in India.
SEBI's proposals include scrapping weekly expiry contracts and raising margins
SEBI wants to scrap weekly expiry contracts (like those for Nifty 50) and switch to bi-monthly or monthly expiries, hoping to slow down risky short-term bets.
They're also looking at raising margins for options trades, easing them for cash trades, and possibly tweaking transaction taxes—all aimed at curbing speculation.
Retail trader losses soared by 41% in FY25
After a US firm was accused of market manipulation and data showed that 91% of retail traders lost money in FY25 (with total losses soaring by 41%), SEBI says it's time for "structural reforms."
Chair Tuhin Kanta Pandey wants a fairer market that still grows, especially since India's options market now makes up nearly 90% of global volume and has seen a surge in new traders.
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