SEBI Warns on Expiry-Day F&O Trading Boom and Retail Losses
Why in the news
SEBI warned that ultra-short-term index options, especially expiry-day contracts, threaten retail investors and stability.
Key facts
- Trend hurts long-term capital formation and adds systemic risk.
- Weekly index options expiring the same day drive the turnover.
| Stage | Measure |
|---|---|
| Since October 2024 | Weekly expiries restricted; lot sizes up; spread margins tightened |
| Recent | Action against Jane Street; options turnover fell 20-36% |
| Planned | Longer contracts; deeper cash equity market |
Strategic focus
- Reduce speculation; promote REITs, InvITs, corporate and municipal bonds; protect investors.
Exam angle
- Figure: 91% of retail traders lost in FY25.