India’s options market has seen a sharp slowdown in trading activity, particularly on weekly expiry days, following regulatory action by the Securities and Exchange Board of India (SEBI) against US-based proprietary trading firm Jane Street.
On the National Stock Exchange (NSE), index options premium turnover has dropped significantly over the last three weeks. From Rs 80,731 crore on June 26, it fell to Rs 61,511 crore on July 3—the day SEBI issued its order against Jane Street. Turnover slipped further to Rs 45,884 crore on July 10, marking a 25 per cent drop week-on-week.
Overall derivatives premium turnover on the NSE mirrored this trend, declining from Rs 4.13 lakh crore on June 26 to Rs 1.61 lakh crore on July 3, and Rs 1.38 lakh crore on July 10. In the first eight trading sessions of July, options turnover totalled Rs 10.4 lakh crore—down over 30 per cent from Rs 15.22 lakh crore recorded in the same period in April.
At the BSE, weekly expiry volumes have dropped as well. Index options premium turnover fell from Rs 44,010 crore on June 24 to well below Rs 20,000 crore on July 8—the immediate expiry after SEBI’s Jane Street order.
Institutional and HFT pullback
Market participants say SEBI’s order, which alleged unfair trade practices, has rattled large institutional traders and high-frequency trading (HFT) firms—key contributors to weekly options liquidity. This has led to a broader pullback in risk-taking and reduced provisioning of liquidity across both exchanges.
“The chill in turnover reflects how sensitive the market is to regulatory intervention,” said a senior derivatives trader at a domestic brokerage. “Traders are staying cautious, especially ahead of the expiry schedule shift between NSE and BSE in September.”
BSE shares under pressure
The SEBI action also comes amid structural shifts in the market, including the expiry alignment changes set for later this year. Meanwhile, shares of BSE Ltd have fallen nearly 15 per cent in the last one month, indicating investor concern about potential declines in derivatives-linked revenue.
While some analysts expect a gradual recovery in the coming weeks, others caution that tighter compliance and reduced institutional interest may keep volumes subdued in the near term.
