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

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

• Two-Year Growth:

1. 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.

Click Here To Read The Full Press Release