Measures announced by Sebi should limit individual trading in F&O segment

For immoderate clip now, determination has been interest astir the surge successful trading successful the Futures and Options segment. In caller years, trading volumes successful the Indian derivative markets have, successful fact, been importantly outstripping the currency market, arsenic documented successful a study by Axis Mutual Fund. The study had besides pointed retired that the derivatives to currency volumes ratio successful India was considerably higher than successful different countries. Much of this summation has been driven by retail investors, astir of whom person mislaid wealth successful this segment, yet person continued to trade. As per a caller survey by the banal marketplace regulator, portion 1.13 crore individuals person mislaid a staggering Rs 1.81 lakh crore trading successful the F&O conception during the past 3 fiscal years, much than three-fourths of those who mislaid wealth successful the preceding 2 consecutive years, continued to trade. This has been a root of interest successful the argumentation establishment. The Economic Survey 2023-24 noted that arsenic trading successful these segments has the anticipation of generating immense gains, it “caters to humans’ gambling instincts”. It is these considerations, the Survey argued, that “are apt driving progressive retail information successful derivatives trading.” In July, the Union fund raised the securities transaction taxation connected futures and options of securities — connected futures from 0.0125 per cent to 0.02 per cent and connected options from 0.0625 per cent to 0.1 per cent. In the aforesaid month, Sebi released a consultation insubstantial that projected steps to curb speculative trading successful derivatives. And connected Tuesday, it announced measures to tighten the norms astir trading.

Six measures person been introduced. These scope from expanding the declaration size for scale futures and options to Rs 15 lakh from Rs 5 lakh to Rs 10 lakh currently, to the upfront postulation of enactment premium, rationalisation of play scale derivatives products, and monitoring of presumption limits during the day, particularly erstwhile determination are ample trading volumes connected the expiry day, among others. Seen together, these measures are designed to rise the introduction obstruction for investors, making it much costly to commercialized successful the F&O segment. After all, a caller survey by the stock market regulator had pointed retired that astir three-fourths of the traders — 65.4 lakh retired of the 95.75 lakh idiosyncratic traders — person a declared income that is little than Rs 5 lakh.