Archive · 9 Nov 2025
India's F&O Turnover Hits 2-Year High in October Amidst Market Speculation
Imagine the stock market has two main ways people play: one is buying actual company shares (cash market), and the other is making bets on future prices using special contracts (F&O market).
In October, people made a lot more bets in the F&O market, the most in two years!
But, they bought fewer actual company shares, and that part of the market got smaller.
Experts think this is because some stocks have gone up a lot, making people feel optimistic and want to bet more.
Even though the market watchdog, Sebi, tried to put rules in place to slow down these bets, especially for options, the F&O market got even busier.
The article also mentions that even though the F&O market is busy, most individual traders in this F&O market actually lost money, with about 91% losing out in a recent year.
India's F&O market turnover hit a two-year high in October, reaching 476 times in notional terms.
The cash segment turnover in October decreased by 4% month-on-month, reaching Rs 22.34 lakh crore.
Despite Sebi's guidelines to curb speculation, derivatives market activity has significantly increased.
Average daily turnover in premium terms for F&O also hit a five-month high, at 2.2 times the cash segment volumes.
Analysis shows that a large majority of individual traders (91%) in equity derivatives incurred net losses in FY2025.
- Who
- Investors, stock market participants, SEBI, stock exchanges, Nirmal Bang.
- What
- Futures and Options (F&O) market turnover in notional terms reached a two-year high in October, while cash segment turnover fell.
- When
- October, with comparisons to October 2023, July 2024, and Sebi's measures implemented between November 2024 and February 2025.
- Where
- Indian stock markets.
- Why
- Higher F&O volumes are attributed to stock run-ups and bullishness, while the cash market declined. Speculative activity continues despite Sebi's guidelines.
Market Optimists
Cautious Analysts
Derivatives Market Activity
Market Optimists
Higher F&O turnover is driven by strong run-ups in stocks and bullishness, indicating investor confidence and active participation.
Cautious Analysts
The increase in F&O turnover, despite Sebi's guidelines, highlights continued speculation and a potential disconnect from the cash market's performance.
Impact of Sebi's Measures
Market Optimists
Sebi's measures have led to a reduction in index options turnover, suggesting a curbing of excessive speculation.
Cautious Analysts
Despite Sebi's efforts, the F&O turnover in October reached a two-year high, indicating that these measures may not be fully effective in curbing speculative activity.
Investor Returns and Portfolio Shifts
Market Optimists
Investors have seen significant returns (2x) in mid and small caps over the last two years after shifting portfolios, showing successful investment strategies.
Cautious Analysts
The shift towards mid and small caps, followed by a recent decline, suggests potential challenges for investors, especially when portfolios are underperforming and preventing profit-taking.
- October F&O Notional Turnover Multiple
- 476 times (highest in 2 years)
- October Cash Segment Turnover
- Rs 22.34 lakh crore
- October Cash Segment Turnover Change
- Down 4% month-on-month
- Highest Cash Market Turnover (July 2024)
- Rs 32.96 lakh crore
- October Daily F&O Premium Turnover
- 2.2 times cash segment volumes (5-month high)
- Individual Trader Profitability (FY2025)
- 91% incurred net loss
- Individual Trader Profitability (FY2024)
- Similar trend to FY2025
