The Securities and Exchange Board of India on Monday announced sweeping changes to the derivatives framework, cutting the number of weekly options contracts from 7 to just 1 per exchange and doubling minimum lot sizes, in a bid to reduce speculative retail trading and protect small investors.
The new rules, effective from June 1, 2026, come after SEBI’s landmark study revealed that 93% of individual F&O traders lost money over a three-year period, with average losses of ₹1.1 lakh per trader. The regulator has been under pressure from the Finance Ministry to rein in what officials have described as a ‘gambling mentality’ in options markets.
Under the new framework, each exchange can offer weekly expiry contracts on only one benchmark index—Nifty 50 for NSE and Sensex for BSE. Monthly and quarterly contracts will continue for index and stock options. The minimum contract value has been doubled to ₹15 lakh from the current ₹7.5 lakh, effectively pricing out retail traders with limited capital.
SEBI also mandated upfront collection of option premium from buyers on trading day itself (T+0), ending the practice of premium deferral that had allowed highly leveraged positions. Intraday position limits for index derivatives have been cut by 40%.
The industry reaction was sharply divided. NSE and BSE shares fell 4-6% as the new rules threaten a key revenue stream—weekly options now account for nearly 70% of total notional F&O volumes. Discount brokers like Zerodha and Upstox, which earn per-order commissions, expressed concerns about a significant volume drop.
However, investor advocacy groups and financial planners broadly welcomed the measures. ‘SEBI is finally prioritising investor protection over market revenue,’ said Deepak Shenoy, founder of CapitalMind.
