Impact of SEBI's New Rules on F&O Trading

Recent changes implemented by the Securities and Exchange Board of India (SEBI) significantly altered the landscape of futures and options (F&O) trading in India. One major adjustment includes limiting weekly contracts to one major index per exchange, which restricts traders like Mr. Bull, who thrived on weekly betting opportunities, to now rely solely on monthly contracts. Additionally, raising the minimum investment for index derivatives from 5 to 10 lakh rupees to 15 to 20 lakh rupees escalates the financial barrier for entry into the F&O market. This combination of factors not only pressures individual traders but also raises concerns about reduced market liquidity and could potentially decrease derivatives trading volumes by 20-25%, influencing the overall growth of Indian markets.