SEBI tightened F&O rules mainly because its studies showed that most individual traders were losing money, and that speculative activity, especially on expiry days, had grown sharply. The changes aim to reduce excessive risk-taking by retail traders.
SEBI’s FY25 study found that 91% of individual F&O traders lost money, with combined net losses of ₹1,05,603 crore. Much of the activity was concentrated in cheap, short-dated index options traded around expiry.
The framework announced in a circular dated 1 October 2024 was rolled out in phases:
- From 20 November 2024: one weekly expiry per exchange, a higher minimum contract value (₹15 lakh at introduction), and an extra 2% extreme loss margin on short options on expiry day.
- From 1 February 2025: option premium collected upfront from buyers, and no calendar-spread margin benefit on expiry day.
- From 1 April 2025: intraday monitoring of position limits.
As a result, NSE now offers a weekly expiry only on Nifty 50, and BSE only on Sensex; the last Bank Nifty weekly expiry was on 13 November 2024. Bigger contract sizes also mean beginners need more capital per trade, which raises the stakes of a mistake.
Lot sizes, expiry days and taxes such as STT have changed again since, so check the latest NSE and SEBI circulars before trading.
Our post on SEBI’s F&O overhaul has more detail, and the Option & Future certification course is updated for the current rules.