The year 2025 brings several key changes to Futures & Options (F&O) trading regulations, announced by market regulators. These updates aim to strengthen market structure, improve liquidity, and maintain transparency. This article highlights the major changes, including revisions in contract sizes, weekly index options, margin rules on expiry, and stock inclusion/exclusion in the F&O segment.
Contents
- Increased Contract Size
- Single Weekly Index Contract
- Removal of Margin Benefits on Expiry Day
- Addition of New Stocks
- Exclusion of Certain Stocks
- Conclusion
- FAQs
Increased Contract Size
The change that stands out the most is the larger minimum contract amount for index options. It used to be between 5 and 10 lakh rupees, but now it’s between 15 and 20 lakh rupees. One of the notable changes is the revision of the minimum contract value for index options. It has been increased from ₹5–10 lakhs to ₹15–20 lakhs. This adjustment aims to align contract values with the evolving market conditions and trading patterns.
Note: Trading in derivatives involves significant risk. Please assess your risk appetite before trading.
Read Also: Things to Know Before Trading in Futures and Options
Single Weekly Index Contract
Authorities have told exchanges that they can only offer one weekly index derivative deal at a time. The idea behind this choice is to make trading easier and less complicated by not having to deal with so many contracts every week. Exchanges will now be permitted to offer only one weekly index derivative contract per index. This measure is introduced to simplify the range of available contracts and reduce the operational complexity for participants.
Removal of Margin Benefits on Expiry Day
The loss of margin perks for calendar spreads on expiry days is another change that affects traders. As of February 10, 2025, traders must keep up with the complete margin needs for their accounts on these critical days. Traders are expected to rethink their tactics and ensure they have enough collateral when contracts expire due to the removal of margin benefits. Effective February 10, 2025, exchanges will discontinue margin benefits on expiry day for calendar spread positions. Traders will be required to maintain full margin on expiry day to continue holding their positions.
Addition of New Stocks
Six new stocks will be added to the F&O segment on January 31, 2025, to diversify the range of instruments available for trading. These improvements are the result of careful reviews that followed set standards. Six new stocks will be introduced in the F&O segment from January 31, 2025, based on eligibility criteria specified by market regulators. This inclusion aims to expand the range of instruments available to participants.
Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.
Exclusion of Certain Stocks
With the addition of 16 new stocks on February 28, 2025, the F&O section will remove 16 stocks. Today’s choice comes after a thorough review process to ensure that the derivatives market only holds stocks that meet specific legal and liquidity requirements. The benefit of the absence is that it eliminates tools that don’t fit the way the market is right now. Sixteen stocks will be excluded from the F&O segment from February 28, 2025, after periodic reviews conducted as per the regulatory framework.
Read Also: Top 5 Myths About Options Trading Debunked
Conclusion
These regulatory changes for 2025 have been introduced to bring uniformity and transparency to F&O trading. Market participants are advised to stay informed about these updates and review the official circulars and guidelines issued by the exchanges.
Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.
FAQs
Higher contract sizes may mean smaller amounts per contract, but they can make the market more stable by letting people participate in the value.
Yes, trading will continue with one weekly index derivative per index. This change is aimed at reducing the number of available contracts at any time.
Regulators are always looking at how the market is changing so that they can make changes as needed.