2 weeks ago
Sensex Options Gain Non-Expiry Traction After Sebi Curbs
A regulator studied how people traded options before and after new trading rules.
The rules made some contracts larger, reduced the number of weekly expiry days, and increased a risk-related margin on expiry days.
After the changes, Sensex options were traded much more often on days that were not expiry days.
Their non-expiry trading value rose sharply, although it started from a small amount.
Experts say more foreign institutions may be holding positions for several days.
Some trading volume also appears to have moved from weekly contracts that were discontinued or restricted.
Retail traders, by contrast, have often concentrated their activity on expiry days.
The Bombay Stock Exchange’s expiry-day trading remained larger, but the gap between expiry and non-expiry activity became much smaller.
BSE Sensex options’ non-expiry average daily turnover rose from ₹1,101 crore before policy tightening to ₹6,917 crore afterward.
BSE non-expiry turnover increased further to ₹15,667 crore in the recent period ending in FY26.
BSE’s expiry-to-non-expiry turnover ratio fell from 20.2 times to 3.4 times across the study periods.
Experts attributed the shift partly to greater foreign institutional participation and trading activity moving from other weekly contracts.
Foreign portfolio investors’ share of BSE equity-derivatives turnover rose to 3.22% in FY26 from 1.95% in FY25.
- Who
- The Securities and Exchange Board of India, foreign portfolio investors, retail traders, and participants in Sensex and Nifty options markets.
- What
- A Sebi study found that BSE Sensex options gained substantial non-expiry-day trading activity after derivatives-market restrictions were introduced.
- Where
- India’s equity-derivatives markets, particularly the Bombay Stock Exchange and the National Stock Exchange.
- When
- The study compared April–October 2024, December 2024–March 2025, and October 2025–March 2026; the policy changes began in November 2024.
- Why
- Policy changes reduced weekly expiries and altered contract and margin rules, while experts said institutional participation and redirected trading volumes supported Sensex options.
Institutional-Participation Explanation
Policy-Driven Volume Shift Explanation
Why non-expiry trading increased
Institutional-Participation Explanation
Markets analyst Shai Coelho attributed the rise in Sensex options’ non-expiry activity to greater institutional participation, noting that institutions tend to hold positions across several days.
Policy-Driven Volume Shift Explanation
Consultant S.K. Joshi said reducing weekly expiry contracts redirected volumes toward the remaining Nifty and Sensex options, which gained traction over time.
Typical trading behavior
Institutional-Participation Explanation
Institutions are described as trading or holding positions from Monday through Thursday rather than concentrating activity on expiry days.
Policy-Driven Volume Shift Explanation
Retail traders are described as concentrating their trades on expiry days, while the policy changes reduced the number of such available contracts.
Key facts
- Study title
- “Profitability of individual traders in the equities derivatives segment FY25-FY26”
- BSE non-expiry turnover
- Rose from ₹1,101 crore before policy tightening to ₹6,917 crore immediately afterward, then to ₹15,667 crore in the recent period.
- BSE expiry turnover
- Increased from ₹22,271 crore before policy tightening to ₹25,648 crore immediately afterward and ₹53,357 crore in the recent period.
- BSE expiry-to-non-expiry ratio
- Declined from 20.2 times to 3.7 times and then 3.4 times across the three study periods.
- Foreign portfolio investor turnover share
- BSE’s share rose from 1.95% in FY25 to 3.22% in FY26; the comparable NSE figure was 6.96% in FY26.
- Foreign portfolio investor open-interest share
- BSE’s share increased from nil to 9.09% over the comparative period, while the NSE figure was 31.70% in FY26.
- BSE share-price performance
- The BSE share rose 50.2% in one year and 1,005.21% over three years, according to the figures cited in the article.
Quotes
Shai Coelho
Founder of markets analytics platform Vtrender
“The rise in non-expiry day ADT of Sensex options is attributable to greater institutional participation. Institutions tend to hold positions from Monday through Thursday as opposed to retail traders whose trades are concentrated on the expiry day (Thursday) .”
livemint.com
S.K. Joshi
Consultant at Khambatta Securities
“Sebi cut that to just on a weekly basis per exchange effective November 2024, resulting in those volumes moving to the Nifty and Sensex, which gained traction over time.”
livemint.com
Sources
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