SEBI Actions on Weekly expiry and its impact in short and long term

SEBI’s recent clampdown on speculative options trading has triggered a market value erosion of roughly ₹1.75 lakh crore, impacting exchanges like BSE and NSE along with broking firms that rely heavily on F&O revenues. BSE shares have corrected nearly 29% from their peak, wiping out around ₹35,000 crore in market cap, while NSE’s unlisted shares are down about 22%, erasing roughly ₹1.4 lakh crore in value. Brokerages such as

One have also seen sharp declines, with share prices dropping nearly 37% from their highs. The market fears that SEBI may cut back weekly derivative expiries to fortnightly or monthly, which could reduce trading turnover substantially. This has led investors to price in lower future revenues and margins for exchanges and brokers. The move is part of a broader regulatory effort to curb speculative behaviou after data revealed that more than 90% of retail traders in equity derivatives incurred losses in the last financial year. Other proposed measures include increasing lot sizes, raising margins on short options positions, collecting premiums upfront, and removing certain expiry-day margin benefits. Short-Term Impacts Stock prices of exchanges and brokers remain under pressure amid regulatory uncertainty. Derivatives turnover is likely to dip as weekly expiry participation slows. Near-term earnings expectations for brokers and exchanges may get downgraded. Investor sentiment could weaken further until clarity on SEBI’s next steps emerges. Long-Term Impacts Trading activity may structurally shift toward longer-tenure contracts. Speculative participation could decline, leading to a more balanced market. Exchanges and brokers may need to innovate new products or diversify revenue streams. Valuations of exchange and brokerage stocks may reset to reflect slower F&O growth. Regulatory oversight will remain a key driver of market behaviour and profitability.