NSE to discontinue three weekly options contracts including Bank Nifty

National Stock Exchange (NSE) has announced that weekly index derivatives contracts on Bank Nifty, Nifty Midcap Select, and Nifty Financial Services will be discontinued effective from November 13, November 18 and November 19, respectively. 

This decision by NSE has been taken to comply with the new rules issued by the Securities and Exchange Board of India (SEBI) earlier this month for trading in futures and options (F&O).

Now NSE will have only one weekly tradeable index, which is Nifty 50.

As per the new F&O rules "from November 20, only one weekly index derivatives contract will be allowed per exchange".

Earlier on October 3, the Bombay Stock Exchange (BSE) announced that the weekly derivatives contracts of Sensex 50 and Bankex would be discontinued from November 14 and November 18. Only Sensex weekly derivatives contracts will be available for trading.

According to the new F&O rules, exchanges are now required to monitor intraday positions at least four times a day and impose penalties if any intraday limit is breached.

After the new SEBI circular, the size of derivatives contracts in benchmark indices like Nifty and Sensex will increase from Rs 5 lakh-Rs 10 lakh to Rs 15 lakh-Rs 20 lakh.

SEBI tightened F&O rules due to the continuous losses incurred by retail investors in the derivatives segment. Recently a study was released by the market regulator. It was reported that in the last three years, 1.10 crore traders in the F&O segment have suffered a combined loss of Rs 1.81 lakh crore.

Out of the total, only 7 per cent of F&O traders have managed to make money.

According to the exchange data, equity cash market turnover in India has doubled from FY 20 to FY 24, while the turnover of index options has increased 12 times to Rs 138 lakh crore in FY 24, which was Rs 11 lakh crore in FY 20.