India’s derivatives market surges 33% in October despite stricter Sebi regulations
The derivatives market in India experienced a notable increase in October, with a 33% month-on-month rise in BSE's futures and options average daily turnover (ADTV), and a 5.6% rise at the National Stock Exchange (NSE). This growth occurred despite regulatory tightening and high losses among retail investors.
The market reached a 12-month high of Rs 506 trillion in October, marking a 46% increase since June. This surge was driven by easing concerns over further regulations and increased volatility. The turnover was just 5.6% lower than the September 2024 peak of Rs 516 trillion. However, cash volume stood at Rs 1.06 trillion, about 35% lower than the June 2024 peak of Rs 1.65 trillion.
Sebi, under the leadership of Tuhin Kanta Pandey, implemented several curbs in November 2024 to manage derivatives volume. These measures included reducing weekly expiries, increasing minimum contract size, and imposing an upfront premium for options. Despite these measures, the market demonstrated resilience and growth.
The derivatives market's robust performance in October, despite regulatory curbs and high retail investor losses, indicates a strong appetite for risk and speculation among market participants. The market's ability to absorb these changes and continue growing suggests a high level of confidence and liquidity.
