SEBI is examining a significant change in the derivatives market by considering removal of weekly F&O expiry. The proposal is aimed at reducing retail investor losses, which stood at ₹91,685 crore in FY26 according to a SEBI study. Weekly contracts are seen as adding sharp volatility and causing low liquidity under the CAS mechanism.
Officials believe that scrapping weekly expiries could free up nearly 100% of capital locked in options margins, allowing investors to deploy funds in equities. This step is part of SEBI’s broader plan to curb risks in derivatives and redirect activity toward cash markets.
Retail traders have faced consistent losses in F&O despite rising participation. Weekly contracts, though popular, are viewed as amplifying risks for small investors chasing quick returns. SEBI’s intent is to safeguard retail investors and promote healthier investment practices.
By shifting focus to cash markets, SEBI expects improved liquidity, reduced volatility, and more stable capital flows. While discussions are still at an early stage, the regulator’s direction is clear.
If implemented, this reform could reshape trading behaviour, making equities more attractive for long-term investors while limiting speculative excesses in F&O.
