Will SEBI Ban Weekly F&O Contracts? Chief Tuhin Kanta Pandey Clarifies
Recent speculation surrounding the potential ban on weekly Futures and Options (F&O) contracts has been addressed by Securities and Exchange Board of India (SEBI) Chairperson Tuhin Kanta Pandey. Speaking at the Business Standard BFSI Summit 2025, Pandey clarified that SEBI is not considering an abrupt halt to weekly F&O expiries. He emphasized that any new measures for the derivatives market would be introduced gradually and after thorough consultation with stakeholders.
Pandey's comments come amid growing interest and anticipation from market participants regarding potential reforms in the high-volume F&O segment. The derivatives market in India has seen significant growth, accounting for nearly 95% of the National Stock Exchange's (NSE) total turnover. However, this surge has also raised concerns about increased speculative activity and retail participation, prompting SEBI to consider measures to enhance market safety and transparency.
SEBI's apprehension stems partly from an internal study conducted last year, which revealed that retail investors had lost approximately ₹1.8 lakh crore in F&O trading over three years, primarily due to speculative bets on short-term options. More recent data indicates that retail investors lost ₹1.06 lakh crore in the F&O segment during FY2025, a 41% increase from the ₹74,812 crore loss in FY2024. These figures have fueled the debate on whether stricter regulations are needed to protect retail investors from potential losses.
Pandey acknowledged the popularity of weekly expiries among traders and institutions, stating, "We cannot just shut down weekly F&O expiries. Many market participants are actively using it". He reiterated SEBI's commitment to strengthening the F&O segment without disrupting participation. To this end, SEBI has already taken several steps to make the derivatives market more resilient.
These measures include increasing contract sizes for options, limiting weekly expiries to one per exchange, revising eligibility criteria for derivatives on non-benchmark indices, and tightening market-wide position limits. Additionally, SEBI has implemented changes to pre-open and post-market sessions and mandated a shift to a delta-based calculation of open interest, instead of a notional one. This shift allows open positions to be measured by real risk exposure, helping to curb speculative build-up and manage systemic risk more effectively.
In September 2025, the NSE and BSE swapped their weekly expiry days, with NSE moving to Tuesday and BSE shifting to Thursday. This move aimed to balance liquidity between the two exchanges and reduce crowding in the weekly options segment.
SEBI is currently gathering and analyzing extensive data on F&O trading patterns to evaluate the broader market impact. Pandey stated that this data would be released in the form of a consultation before any further action is taken. This consultative approach has been largely welcomed by the market, despite some measures impacting short-term traders.
While SEBI has delayed a final decision on the potential discontinuation of weekly expiries in equity derivatives, the matter remains under consideration. Pandey has promised transparency in sharing details with market participants as they become available. In the meantime, SEBI's focus remains on implementing calibrated changes to strengthen the equity derivatives framework, manage risks, and ensure market stability.
