Sources said SEBI will study data from July to September to assess unusual retail participation before making decisions. Other measures, such as deepening cash markets or incentivising longer-duration derivatives, are also under consideration.
Rajesh Baheti, MD at Crosseas Capital Services, said the debate over weekly options is secondary to their merit as a product. “The merit question should be put to rest now,” he said, noting that similar short-term contracts exist internationally. He added, “You can’t suffocate the market. Liquidity is one of the main virtues of the capital market.” Baheti suggested SEBI may find it difficult to restrict weekly options while zero DTE products are available globally.
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K Suresh, National President of ANMI, said SEBI’s approach has been unclear, with shifting goals between fortnightly and weekly expiries. “Going on, shifting the goals or giving rumours to market…may affect the sentiment of the market, may affect the liquidity of the market, may affect the brokers’ business models,” he said. Suresh stressed the need to focus on investor education, noting that only about 36% of investors are well-informed. “We have to think aloud on the part of plugging the educational gap,” he added.
Baheti also suggested government measures could encourage cash market participation without limiting derivatives. “You can encourage another segment by incentivising it, but not by putting breaks on another segment,” he said. He highlighted the lack of correlation margin set-offs as an area that could be improved for longer-duration positions.
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Experts agreed that SEBI should focus on creating clear rules, bridging the knowledge gap among investors, and supporting liquidity, rather than restricting products. “As a product, it’s not that it is not needed in the country,” Baheti said, emphasising the theoretical merit of derivatives.
Overall, the discussion reflects the need for clarity, data-driven decision-making, and investor education while considering any changes to weekly options and related derivative products.
For the full interview, watch the accompanying video
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