A recent SEBI study shows that weekly options contracts are attracting more activity on non‑expiry days, a shift that could alter how retail investors navigate the Indian equity market. 4 times by the end of FY26, down from a peak of over 20 times before November 2024. The steep decline follows a series of measures introduced by SEBI in late 2024 to rein in what it described as a retail frenzy in options trading.
The board tightened position limits for individual investors, raised margin requirements for high‑frequency strategies, and placed tighter surveillance on speculative bets that drove premium volumes sky‑high. Those steps were aimed at reducing systemic risk and protecting small investors from the rapid loss of capital that can accompany leveraged option positions. For the average salaried professional, the shift means that weekly options are now being used more as a hedging tool rather than a pure speculative instrument.
Lower premium turnover translates into tighter spreads and reduced transaction costs on non‑expiry weeks, making it easier for investors to manage risk without exposing themselves to the extreme volatility that once characterized expiry‑driven spikes in the Sensex and Nifty. Going forward, market participants are advised to treat weekly options as part of a broader portfolio strategy, keeping an eye on the evolving regulatory landscape. While the reduced frenzy may bring more stability to the indices, investors should still conduct thorough research and align option positions with their personal risk tolerance and financial goals.