{"id":12282,"date":"2025-07-22T13:45:45","date_gmt":"2025-07-22T08:15:45","guid":{"rendered":"https:\/\/trending.niftytrader.in\/long-term-fo-contracts-c\/"},"modified":"2025-07-22T18:35:30","modified_gmt":"2025-07-22T13:05:30","slug":"long-term-fo-contracts-c","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/long-term-fo-contracts-c\/","title":{"rendered":"Sebi Pushes for Stronger Derivatives Framework"},"content":{"rendered":"

In an effort to strengthen India\u2019s derivatives market, the Securities and Exchange Board of India (Sebi) is exploring new measures to reduce excessive short-term speculation and promote long-term stability. Ananth Narayan, a Sebi whole-time member, emphasized the potential benefits of extending the tenure of futures and options (F&O) contracts to curb market volatility.<\/p>\n

Short-Term Trading Raises Red Flags<\/h2>\n

Narayan pointed out that the current F&O market is largely dominated by short-term trades, a trend that is increasingly worrying for both regulators and investors.<\/p>\n

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\u201cA lot of the activity in the F&O space is short-term in nature, and that\u2019s not necessarily healthy for the overall ecosystem,\u201d he noted.<\/p>\n

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Retail Participation Under the Microscope<\/h2>\n

One of the key concerns for regulators is the growing exposure of household savings to speculative trading in the F&O segment. A recent Sebi study revealed that a significant number of retail traders are incurring heavy losses, highlighting the need for better safeguards.<\/p>\n

New Rules to Encourage Responsible Trading<\/h2>\n

To address these risks, Sebi has already rolled out measures aimed at discouraging short-term speculation. The broader goal is to shift the market towards more responsible and long-term practices that align with fundamental trends rather than fleeting price movements.<\/p>\n

Balancing Innovation with Investor Protection<\/h2>\n

While there is some resistance from industry stakeholders over the potential impact on trading volumes and revenue, Sebi remains committed to building a sustainable, investor-friendly F&O market. Longer-tenure contracts, it believes, could be a key part of that solution.<\/p>\n

Ongoing Dialogue with Stakeholders<\/h2>\n

Sebi is expected to continue its dialogue with industry participants to develop a well-rounded framework that balances market development, innovation, and investor protection in the rapidly evolving F&O space.<\/p>\n

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