NSE to retain Nifty 50-linked weekly options after new derivatives rules

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The National Stock Exchange of India said on Thursday it will retain weekly derivative contracts linked to the benchmark Nifty 50 index, after the country's markets regulator announced tighter rules for equity derivatives.

The move follows the Securities and Exchange Board of India's (SEBI) order requiring exchanges to cut down the number of weekly options contracts available to investors to one from Nov. 20.

The new rules were put in place to curb a recent spurt in options trading by retail investors that the regulator and the government view as a risk to household finances.

A SEBI study showed that individual traders made net losses totalling 1.81 trillion rupees ($21.57 billion) in futures and options in the three years to March 2024, with only 7.2% making a profit.

NSE said it will discontinue its other three weekly options linked to Bank Nifty, Nifty Financial Services and Nifty Mid-Cap.

Last week, driven by the same order, BSE said it will discontinue weekly derivative contracts linked to Bankex (.BSEBANK), and Sensex 50, retaining only contracts linked with its benchmark BSE Sensex, an index of 30 bluechip stocks.