The Securities and Exchange Board of India’s (Sebi’s) six-step plan to curb retail participation in speculative index derivatives may lead to a substantial drop in volumes – potentially by 30-40 per cent. These measures aim to reduce excessive speculation in the futures and options (F and O) segment, where daily turnover often exceeds Rs 500 trillion and retail investors end up on the losing side of the trade more often. Sebi has decided to increase the contract size from Rs 5 lakh to Rs 15 lakh, raising margin requirements and mandating the upfront collection of option premiums from buyers.
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