How to curb speculation in F&Os

Sebi is also concerned about the absence of a link between the cash market and the derivatives market. But the majority of options traders have never traded options to take or give delivery

Speaking at a press conference last Thursday, Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (Sebi), expressed concern over massive speculative volumes in derivatives trading. Trading volumes in derivatives have indeed exploded (mainly in stock options) over the past few years, leading to fears of speculative excesses.

Nithin Kamath, founder of stockbroking firm Zerodha, said on X: “We are in the middle of a period of excess in options trading. Volumes in index options have gone up from Rs 4.6 lakh crore (Rs 4.6 trillion) in 2018 to Rs 138 lakh crore