Stocks Stumble, Options Fumble: Sebi’s Serial Crackdown Shakes the Market

Sebi's recent crackdown on excessive speculation in the futures and options (F&O) market has resulted in a sharp decline in trading volumes. The regulator's six-point plan, put in place between November 2024 and April 2025, involves raising minimum contract sizes, hiking margin requirements, and capping weekly expirations. Consequently, F&O volumes touched a 16-month low in December 2024. Broking companies have also suffered, with shares of IIFL Securities, 5Paisa, and Geojit Financial Services declining as much as 8% after the announcement. The steps are intended to safeguard retail investors, 91.1% of whom lost money in F&O trading in FY24. Industry insiders expect a 30-50% decline in revenue for certain brokers because of these regulations.

 

Source: Economic Times, Business Standard, Moneycontrol