End of Weekly Derivatives May Unveil Options Trading Shake-Up

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Market mentor Amit Seth warns retail participation in index options may plunge as SEBI considers shifting to monthly expiries

By S JHA

MUMBAI, August 21, 2025 — The Securities and Exchange Board of India (SEBI) is considering a major overhaul of India’s derivatives market by doing away with weekly options expiries and moving exclusively to monthly contracts. According to CNBC-TV18, SEBI Chairman has hinted that the regulator’s intent is to reduce the number of expiries, with a final consultation paper expected soon.

Stock market mentor Amit Seth, reacting to the news in his Telegram channel, said the move could dramatically alter trading patterns. “Index Option volumes and retail interest will go down massively. Most traders prefer weekly options, not monthly,” he wrote.

Seth argued that while retail traders may be discouraged, blue-chip stocks could see more natural price discovery. “Blue chips will have better rhythm and respect classical Dow Theory, as they won’t be subjected to expiry-day index management by big hands,” he added.

He further warned that SEBI is likely to introduce more regulations to curb speculative activity. “Slowly SEBI will come with more regulations to discourage retail participation in futures and options. Trading will shift more toward the cash segment, requiring decent capital to participate,” Seth noted.

This comes amid growing regulatory concern over retail losses in the F&O segment. According to SEBI’s own study, a vast majority of individual investors trading in options and futures end up losing money, raising questions over the suitability of weekly derivatives for small traders.

Market exchanges have also suggested a move to monthly expiries, aligning with SEBI’s intent to reduce the intensity of expiry-driven volatility.

If implemented, the shift could mark one of the most significant structural changes in India’s derivatives market in recent years—potentially reshaping retail trading behaviour and market liquidity.

India has seen a massive spike in F&O trading in recent years. A large number of retail traders are taking positions in option trading. Currently, Nifty, BSE Sensex, and few more instruments are available for weekly option trading.

SEBI recently moved Bank Nifty to monthly contracts, which per market participants made the contracts costly for small retail traders, and thus reduced its trading volume. Earlier, Bank Nifty also had weekly contracts for derivative trading.