Options fever begins to cool as Sebi curbs kick in

The number of index options traded plunged 30% in week ended December 6

- Ram Sahgal

MUMBAI: The options frenzy among India's retail investors may be beginning to cool as regulatory measures to prevent widespread losses begin to take effect.

During the week ended December 6, the first under the new regime of just two weekly expiries, the number of index options traded plunged 30% to 214 crore contracts, data from the National Stock Exchange (NSE) and BSE showed. That compares with 304 crore weekly Nifty and Sensex, and monthly Bank Nifty and Finnifty options traded in the week ended November 29, when each day saw a contract expire.

Though the number of contracts traded was sharply lower, the premium turnover—or the market value of these options—for the week was marginally higher. The reason: The huge participation in Nifty weekly contracts on December 5, a day before the monetary policy announcement.