SEBI Reports YoY Dip in Derivatives Turnover | 2-Year Index Option Growth

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  • Last Updated on 10 July, 2025

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SEBI equity derivatives turnover

PR No.39/2025; Dated: 07.07.2025

The Securities and Exchange Board of India (SEBI) has conducted a comparative study of trading trends in the Equity Derivatives Segment (EDS) vis-à-vis the Cash Market for the period December 2024 to May 2025, following the implementation of recent regulatory measures aimed at curbing excessive speculation and improving market stability.

1. Mixed Growth Trends Observed in Index Options

The study reveals a mixed pattern of growth in index options, the most traded segment of the EDS:

  • Year-on-Year (YoY) Decline:

    1. Turnover (premium terms): ↓ 9%
    2. Turnover (notional terms): ↓ 29%

  • Two-Year Growth:

    1. Turnover (premium terms): ↑ 14%
    2. Turnover (notional terms): ↑ 42%

This suggests that while there was a short-term contraction following regulatory changes, the longer-term trend continues to reflect strong participation in index derivatives.

2. Individual Turnover Reflects Similar Divergence

The turnover attributable to individual investors in premium terms also exhibited a similar trend:

  • ↓ 11% YoY
  • ↑ 36% over a two-year period

This reflects a decline in recent months, potentially due to tighter margin requirements and revised contract specifications, but also indicates resilient longer-term interest from retail participants in the derivatives market.

3. Implications of the Study

SEBI’s findings highlight the complex impact of regulatory interventions—successfully reducing speculative spikes in the short term, while maintaining structural interest and liquidity over the longer horizon. The comparative growth in notional and premium values over two years may point to increased market depth and broader participation, especially in index-based strategies.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied