“There are ways to manage concentration like having incentives on early roll over etc. Stopping daily expiry is easy to do… I think some of the measures on F&O are yet to come in play. Many exchanges have expressed desire to start newer daily expiries. If you really want to remove that, you need to have one single day (for all exchanges) for expiry,” a Moneycontrol.com report said quoting Chauhan.
The comments came days after NSE announced a change in its F&O expiry for all index and stocks contracts to Mondays instead of Thursday. The announcement was made via a circular which will be effective from April 4.
On Tuesday, March 4, the exchange announced changes in F&O expiry day for Nifty, Bank Nifty, FinNifty, Nifty Next50 and Nifty Midcap Select to Monday. Meanwhile, Nifty’s weekly contract will also now expire on Monday.
Following the scrapping of weekly contracts of Nifty Bank, FinNifty, Nifty Midcap Select and Nifty Next50, the National Stock Exchange (NSE) had made the monthly expiry days of all the 4 F&O contracts to Thursday with effect from January 1, 2025.
In the same event, Sebi’s whole-time member Ananth Narayan said the regulator is there for derivatives and that he’s happy with the steps taken to curb speculation on expiry day. “Trading in index options have come down without affecting the whole family of derivatives as a whole. We are happy with the outcome.””The regulatory intent which was co-created with market participants is clear. We did find it necessary to reduce volumes on expiry day,” he added.”We will be watchful of incoming data. Our regulatory intent is clear. There are plenty of metrics that has shown that the size of our derivatives markets in relation to our market cap has been extraordinarily high compared to global standards. Why we said we have to take steps… we found that 89% of F&O investors have loss. 93% of all trades mostly in index derivatives were losing money. People who were losing two years in a row continue to trade in the third year as well. Options trading was becoming a national pastime and we needed to use our national resources for better purpose,” added Narayan.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
