SEBI’s Proposal to Curb Trading in Options Impacts Indian Brokerages
On Tuesday, the Securities and Exchange Board of India (SEBI) introduced measures to reduce speculative trading in options, causing a dip in the shares of Indian brokerages. The proposed changes include increasing the minimum trading amount for index options, reducing the number of weekly contracts, and raising margins.
Brokerages like Angel One, 5Paisa Capital, and SMC Global Securities saw a decline of 1-5%, while the exchange operator BSE experienced a 6% increase. The government’s move aims to address the risks posed by retail investors engaging in high-risk trading in the options market.
According to a SEBI discussion paper, over 90 lakh individuals and firms traded index derivatives in fiscal year 2024, incurring losses amounting to Rs 51,748 crore. In response to the proposed changes, Zerodha’s CEO Nithin Kamath stated that the alterations may not significantly impact options volumes.
While some brokerages like Angel One have faced a decline in share prices, others like Dolat Algotech and Motilal Oswal have seen substantial gains. Overall, the market is expected to adapt to the new regulations with minimal disruption to trading volumes.
Published on 31 July 2024, 06:00 IST
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