Index option turnover first decreased in 8 years – Index Option Turnover Reduced for the first time in 8 years

The annual premium turnover of index options has declined for the first time in eight years during FY 2024-25 due to the regulator taking several steps to curb betting and passion in the derivative segment. NSE data shows that the annual premium turnover of the index options declined from Rs 138 lakh crore to Rs 136 lakh crore. Small but this sharp decline has come after a rapid increase in the option trading volume. The index option premium turnover has recorded an annual increase of 58 per cent in the last eight years.

After surveys (in which the futures and options were told about the huge losses of retail traders), SEBI took several steps. These included limiting weekly expiry to a benchmark per exchange, increasing the size of contracts and advance collection of option premium from buyers.

According to the FY 2025 NSE market Pulse report, the monthly average premium turnover during the first eight months was Rs 12.4 lakh crore, which was before the initial regulatory change was implemented. From December 2024 to March 2025 it declined to Rs 9.1 lakh crore. However, the trend towards stock option has increased and has recorded a jump of 40 per cent on an annual basis. The annual turnover has reached close to Rs 20 lakh crore. In recent months, the average trade size has increased in March despite the decline in the average trade in the equity cash segment.

The report also highlighted the change in participation of foreign investors, whose share in equity futures turnover has exceeded 25 per cent, which is 406 base points higher than this period last year. This stake in equity options increased to 9.6 per cent.

Equity futures, especially the increase in stock futures, increased to 432 base points on an annual basis to over 28 per cent, which is the highest annual level so far. His stake in index futures also increased by 105 basis points to 15 per cent on an annual basis in FY 2025.

First Published – April 28, 2025 | 10:48 pm IST