INSUBCONTINENT EXCLUSIVE:
He warned that such activity, unlike longer-duration contracts, may hinder meaningful capital formation."Research has suggested that expiry
day option trading increases market volatility and could lead to noise trading that may potentially undermine confidence in price
formation," Narayan said."I would strongly endorse the view that towards this end, we must look for further ways to further deepen our cash
equities markets, even as we look to improve the quality of our derivatives market by extending the tenure and maturity of the products and
solutions on offer," the WTM said.Also Read: India has staggering 80% market share in global index, stock options: Uday KotakIn its latest
study, Sebi highlighted that 91% of individual traders incurred net losses trading in F&O in FY25, with their aggregate losses crossing Rs 1
This was despite multiple measures taken by the market watchdog to curb speculative trading in the derivatives market
Live Events"This is a large sum of money that could have otherwise gone towards responsible investing and capital formation," Narayan said
in his speech.The Sebi official also highlighted the uniqueness of the Indian derivative market ecosystem, where on the expiry days,
comparable turnover in index options is often 350 times or more the turnover in the underlying cash market.He called this imbalance
"obviously unhealthy" with several potential adverse consequences.Ananth Narayan acknowledged that the regulatory changes introduced in
October 2024 and May 2025 have resulted in the moderation of the trends.Also Read: Shankar Sharma slams high options trading costs in India,
calls it 'frightfully expensive'He emphasised that it was beyond doubt that derivatives and speculative trades are vital for price
discovery, hedging, and ensuring market depth.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their
These do not represent the views of Economic Times)
