India’s Options Trade Value Lags Behind Global Markets: NSE Chief Ashish Chauhan

Calls for Single Expiry Date, Stronger Risk Management to Ensure Market Stability

India may be the world’s largest derivatives market by volume, but the average options trade value remains significantly lower compared to developed markets, according to Ashish Chauhan, Managing Director and CEO of the National Stock Exchange of India (NSE). Speaking at the Moneycontrol Global Wealth Summit 2025 in Mumbai, Chauhan emphasized the need to look beyond sheer trading volume and focus on value-based market growth.

India’s Options Trade Value: A Fraction of Global Standards

Highlighting India’s low per-trade value in the derivatives segment, Chauhan noted that the average trade value in Indian options is just $100, a stark contrast to the much larger trade sizes in developed markets.

“India’s per trade value in options is close to $100, which is very, very low compared to developed countries, which have very, very large per trade value,” Chauhan said. “That’s why our number one status is not justified. It is like comparing grapes to a watermelon.”

Despite India leading in derivatives trading volumes, Chauhan stressed that focusing solely on numbers is misleading. He urged market participants and regulators to prioritize the sustainability of the market rather than just its size.

Calls for a Single Expiry Date to Streamline Market Operations

One of the key concerns raised by Chauhan was the fragmentation of the options market due to multiple exchanges introducing daily expiries. The Securities and Exchange Board of India (SEBI) had earlier attempted to limit the number of expiries per week to protect retail investors, but different exchanges continue to introduce their own expiry dates.

“As of now, there are 2-3 more exchanges trying to come up with their daily expiry on different dates, defeating the purpose of SEBI’s regulations to not have too many expiries in a week to protect small investors,” Chauhan explained.

He warned that if this trend continues, more new exchanges may emerge, leading to an unsustainable number of expiry dates throughout the week.

“There might be many more new exchanges that may come up and ask for additional days in a week for their own daily expiries, which might require other days to be added to the week. That’s why there should be a single expiry date for all exchanges in a week instead of every exchange having a different day for their own contract expiry in a week,” he added.

Support for SEBI’s Regulatory Measures

Despite the market challenges, Chauhan reaffirmed NSE’s support for SEBI’s regulations, crediting them for strengthening investor confidence and increasing market participation.

“All tough-looking regulations brought in by SEBI in the past five years or even the last 30 years have brought more investor trust and participants. NSE fully supports all SEBI measures,” he said.

Strengthening Risk Management in India’s Derivatives Market

Risk management remains a critical area of concern as Indian derivatives trading expands in volume. Chauhan suggested that the concentration of trades near expiry dates could lead to systemic risks, making risk mitigation strategies essential.

Measures Suggested by Chauhan to Reduce Risk:

1. Incentives for Early Rollover – Encouraging traders to roll over positions early to prevent last-minute volatility.
2. Penalties for Last-Minute Trades – Discouraging heavy concentration of trades near expiry, which could destabilize the market.
3. Dynamic Risk Measures – Adapting risk management policies as per evolving market conditions.

“There is no magic pill,” Chauhan admitted. “Based on evolving situations, risks in different areas will become more important to manage, and regulators will have to come up with newer risk management measures each time.”

India’s Derivatives Market: The Road Ahead

With India’s derivatives market continuing to grow at an unprecedented pace, experts believe that structural reforms are necessary to ensure long-term stability. While India dominates in derivatives trading volume, the key challenge remains improving the per-trade value and ensuring sustainable market expansion.

• Regulators like SEBI are expected to tighten risk management measures in the coming months.
• Investors and traders will have to adapt to changing expiry structures if a single expiry date system is implemented.
• The global comparison of India’s derivatives market will depend not just on volumes but also on value, efficiency, and risk control measures.

The Need for a Balanced Approach

Chauhan’s remarks underscore the importance of moving beyond trading volumes and focusing on value-driven, well-regulated derivatives markets. As SEBI continues to refine regulations, balancing market expansion, risk control, and investor protection will be key to India’s financial market evolution.