Fairness F&O turnover dips to 13-month low in December

The overall turnover within the fairness derivatives section fell to a 13-month low in December with regulatory curbs kicking in from November.

Complete F&O turnover for December stood at ₹43.99 crore, a 22 per cent decline over October. Index choices premium turnover has dipped 30 per cent to ₹9.6 trillion in the identical interval. The figures for December are the bottom since November final 12 months that noticed a complete turnover and index choices premium turnover of ₹33.8 trillion and ₹8.8 trillion, respectively.

Complete turnover in addition to index choices turnover hit a peak final 12 months in June totalling ₹63.2 trillion and ₹14.9 trillion, respectively.

Modifications in norms

The regulator launched a bunch of adjustments in derivatives norms to curb retail frenzy within the section. Exchanges shifted to 1 weekly expiry from November 20. The NSE now has a weekly expiry for the Nifty 50 index, and has discontinued it for the Nifty Financial institution, Nifty Monetary Providers and Nifty Midcap Choose indices. BSE has a weekly expiry for Sensex and has discontinued it for Bankex and Sensex 50 indices.

An extra excessive loss margin (ELM) of two per cent was made relevant on the expiry day beginning November 20 to cowl the tail threat briefly choice contracts. This implies the margin on expiry day contracts has gone up by 2 per cent.

The rise in contract measurement for index derivatives to ₹15-20 lakh from ₹5-10 lakh is being at present applied. Upfront assortment of choices premium and elimination of calendar unfold on final day of expiry will get applied in February, whereas intraday monitoring of limits will take impact from April 1.

In FY24, about 60 per cent of merchants made internet losses in futures, in comparison with 91.5 per cent in choices, in accordance with a SEBI examine. What’s extra, 93 per cent of Particular person F&O merchants misplaced cash from FY22-24. On this interval, 1.13 crore distinctive Particular person merchants incurred a mixed internet lack of ₹1.81 lakh crore in F&O. Greater than 1 crore loss-making merchants misplaced, on a mean, about ₹2 lakh per individual within the F&O over the interval of three years.