Kitana Khush Hain Ye Log...

For That #FII Taking Advantages...

The average daily turnover (ADTV) in the equity derivatives segment fell to a 16-months low in December following regulatory tightening aimed at curbing speculative trading and reducing retail participation. In contrast, cash market turnover, which has been declining for five consecutive months, saw a slight month-on-month increase of 4.4 percent in December.

The BSE and NSE combined ADTV for the F&O segment reached Rs 280 trillion in December, the lowest since August 2023, marking a 36.56 percent decrease from Rs 442 trillion in November.

More importantly, the decline is as high as 48 percent if the December volumes are compared with that of September. Index futures turnover dropped for the second consecutive month, while turnover in stock futures, index options, and stock options has declined for three months in a row.

Experts attribute the continued contraction in derivatives volumes to stricter regulations that have curtailed the factors fuelling speculative activity among retail traders. Measures such as larger contract sizes, increased margins, and a reduction in the number of tradable products have been put in place to address market froth and the persistent issue of retail traders suffering consistent losses.