Sebi brakes slow retail race on options street

The Securities and Exchange Board of India's (Sebi) recent measures to cool the retail frenzy in derivatives trading are already bearing fruit, even as more curbs aimed at preventing investor losses kick in next month.

- Ram Sahgal

Retail and proprietary traders accounted for nearly three-quarters of the drop in premium turnover in index options trading on the National Stock Exchange, signaling the impact of the Sebi's tightened curbs on derivatives trading.

Analysts anticipate a further decline in turnover as the increased contract size mandated by Sebi as part of its curbs will become effective in early January.

Of the ₹3.36 trillion or nearly 25% month-on-month fall in index options turnover to ₹10.31 trillion in November, individual and proprietary traders accounted for ₹2.52 trillion, or 75%, of the decline, shows recently released National Stock Exchange data. Institutional investors, domestic and foreign, and corporates accounted for the rest of the decline.