MUMBAI: Despite many a measure that the market watchdog Sebi has introduced since last November, the average daily turnover (ADTV) in the derivatives market rose to a 12-month high in October at Rs 506 trillion—up nearly 46% since June, when it had plunged to the lowest since last November--as volatility picked up and concerns over further regulatory tightening eased.
At Rs 506 trillion, the turnover is just 5.6% lower than the peak of Rs 516 trillion it had scaled in September 2024—when it became the world’s largest derivatives market with close to 75% of the global ADTV of which 95% was on the NSE alone.
Derivatives activity had slumped earlier this year after the Securities and Exchange Board had capped weekly expiries to two days and discontinued weekly contracts on non-benchmark indices.
But successive talks from Sebi brass that they cannot shutter the F&O market one fine day, had lifted the sentiments and volume.
Beginning last November, Sebi under the previous chairperson Madhabi Puri-Buch had rolled out a slew of curbs to control the volume, such as bringing down the weekly expiries to just one each on each exchange; increasing the minimum contract size, making it more expensive for retail investors to trade; upfront premium for options to make them pay the full premium upfront, a measure aimed at reducing speculative leverage; removal of calendar spread benefits by offsetting positions across different contract months; increasing the intraday monitoring of intraday positions to detect potential misuse; higher margins, particularly near the expiry dates, along with an additional ‘extreme loss margin’ of 2% on short option contracts; tighter position limits for market-wide position limits to better align derivatives exposure with cash market liquidity; and rationalizing strike prices by limiting the index options contracts at launch to 50.
Sebi introduced these measures as the regulator’s two successive studies found that vast majority of retail investors—around 94% to be precise--were heavily losing in the derivatives market. The study covering fiscal 2024 and 2025 have found that the average annual loss per retail investor was a hefty Rs 1.25 lakh.
BSE's futures and options ADTV rose 33% month-on-month against NSE's 5.6%, according to the latest data from the exchanges.
While BSE’s F&O ADTV rose 33% on-month in October to Rs 221 trillion, NSE’s was much lower at 5.6% rise to Rs 285 trillion.
As against this, the cash volume was a paltry Rs 1.06 trillion in the reporting month, and about 35% lower than the June 2024 peak of Rs 1.65 trillion. Between January 2025 and October 2025, the cash volume saw negligible growth with the first month’s being in at Rs 1.02 trillion which dipped to 0.93 trillion in February, peaking at Rs 1.19 trillion in May and inching up a tad more in June to Rs 1.21 trillion with the rest of the months ranging from Rs 1.03 trillion to Rs 1.06 trillion.
As against this, the F&O AVDT was a low Rs 286 trillion in January and continued to remain under Rs 300 trillion till May and June when it crossed Rs 400 trillion and further to Rs 506 trillion in October.