If you trade weekly index options in India, the product you traded in 2023 no longer exists in the same form. Between November 2024 and April 2026, SEBI and the Finance Ministry introduced a series of changes to index derivatives. Lot sizes went up, then came down. Weekly expiry products were cut. A cash margin rule arrived. STT on futures jumped 150%. A new method for calculating open interest changed how position limits work.
This article covers every change with verified numbers, the actual dates each rule came into force, the official circular behind each change, and what it means before placing a trade today.
Retail traders in India’s F&O segment lost Rs 1.80 lakh crore on derivatives in the years leading up to 2026. Over 90% of retail F&O participants were on the losing side, year after year. India’s weekly index options market had grown into one of the largest in the world by contract volume, but the regulator’s data showed that most of this volume came from retail traders chasing short-term premium decay with inadequate capital and no structured risk plan.
The resulting rules were not introduced in one circular. They came in phases across nearly two years, and each phase closed a different gap in how the derivatives market was being used.
SEBI’s new F&O rules are a set of regulatory changes to index derivatives trading in India, introduced from November 2024 through April 2026. They cover contract size, lot size, weekly expiry structure, margin collection, transaction tax, and position limit calculation methods.
The rules primarily target index futures and options. The lot size changes, weekly expiry restrictions, expiry day margin rules, and the shift to FutEq open interest all apply to index products. The cash margin rule and STT hike apply broadly across F&O.
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Governing circular: SEBI/HO/MRD-PoD2/CIR/P/2024/00181, December 30, 2024
NSE implementation circular: NSE circular dated October 18, 2024
SEBI raised the minimum contract value for index derivatives to between Rs 15 lakh and Rs 20 lakh. NSE and BSE revised lot sizes for all new index F&O contracts introduced from November 20, 2024, onward.
Existing weekly and monthly contracts continued with old lot sizes until their respective expiries. Quarterly and half-yearly contracts transitioned at the end of the day on December 26, 2024, for Nifty and December 24, 2024, for Bank Nifty.
Lot sizes that came into effect on November 20, 2024:
Index | Lot Size Before Nov 2024 | Lot Size From Nov 2024 |
Nifty 50 | 25 | 75 |
Bank Nifty | 15 | 30 |
Nifty Financial Services | 25 | 65 |
Nifty Midcap Select | 50 | 120 |
Nifty Next 50 | 10 | 25 |
BSE Sensex | 10 | 20 |
BSE Bankex | 15 | 30 |
NSE circular: NSE FAOP70616, October 2025
Following the December 2025 expiry, NSE introduced revised lot sizes for all contracts from January 2026 onward. The revision was made to realign contract sizes with current index levels after the November 2024 increase had pushed contract values above the target range.
Lot sizes as revised per NSE circular FAOP70616:
Index | Lot Size From Nov 2024 | Current Lot Size From Jan 2026 |
Nifty 50 | 75 | 65 |
Bank Nifty | 30 | 30 |
Nifty Financial Services | 65 | 60 |
Nifty Midcap Select | 140 | 120 |
Nifty Next 50 | 25 | 25 |
Weekly contracts reflected this change from the first January 2026 expiry. Existing quarterly and half-yearly contracts transitioned to the revised lot size at the end of the day on December 30, 2025.
Governing circular: SEBI/HO/MRD-PoD2/CIR/P/2024/00181
Each exchange was restricted to offering weekly expiry contracts for only one benchmark index. NSE discontinued weekly expiries for Bank Nifty, Nifty Financial Services, and Nifty Midcap Select from November 20, 2024.
Current weekly expiry schedule as of June 2026:
Index | Exchange | Weekly Expiry Day |
Nifty 50 | NSE | Every Tuesday |
Sensex | BSE | Every Friday |
Bank Nifty | NSE | Monthly only |
FinNifty | NSE | Monthly only |
Nifty Midcap Select | NSE | Monthly only |
Bank Nifty has no weekly expiry contract on NSE today.
Governing circular: SEBI/HO/MRD-PoD2/CIR/P/2024/00181
Sellers of index options must maintain an additional 2% Extreme Loss Margin on the expiry day of the contract. This is charged over and above the standard ELM already applicable to the position.
Worked example:
Nifty is at 24,500. You have sold one lot of a Nifty call option expiring today. Current lot size is 65 per NSE FAOP70616.
Additional ELM = 2% of 24,500 multiplied by 65 = Rs 31,850 in extra margin required on expiry day
Sellers who do not account for this will receive a shortfall notice or face forced square-off before the contract expires.
Governing circular: SEBI/HO/MRD-PoD2/CIR/P/2024/00181
A calendar spread is a position where a trader holds the same index across two different expiry months. This structure previously allowed a reduced combined margin because the two legs offset each other partially.
From November 20, 2024, this offset no longer applies on the expiry day for the leg that is expiring. The expiring position must carry full margin regardless of any hedging in later-month contracts.
Governing circular: SEBI/HO/MRD-PoD2/CIR/P/2024/00181
Brokers must collect the complete options premium from buyers at the time of order placement. Arrangements that allowed premiums to be settled after execution are no longer permitted. Every options buy position requires the full premium available as cash in the trading account before the order goes through.
Governing circular: SEBI/HO/MRD-PoD2/CIR/P/2024/00181
Position limit monitoring shifted from end-of-day checks to multiple intraday snapshots throughout the trading session. Before this change, a trader could build larger exposure during market hours and reduce it before close to appear within limits at day’s end. Intraday monitoring removed that window.
Governing framework: SEBI FutEq proposal, February 2025, as covered in the SEBI consultation
From October 1, 2025, an intraday net position cap of Rs 5,000 crore on a FutEq basis was applied to each entity, replacing the previous end-of-day limit structure. A gross position cap of Rs 10,000 crore on both long and short sides came into effect simultaneously.
SEBI proposal reference: SEBI consultation paper on delta-based OI, February 2025
SEBI replaced notional open interest with a delta-based measure called Futures Equivalent (FutEq) for calculating position limits.
Under notional OI, every options contract counted equally toward position limits regardless of how much the option moved relative to the index. A deep out-of-the-money call with a delta of 0.05 and an at-the-money call with a delta of 0.50 both counted as one unit.
Under FutEq:
FutEq OI = Delta multiplied by Notional Value
Example using verified figures from Zerodha’s FutEq brief:
100 lots of Nifty call options with a delta of 0.5 and a notional Rs 100 crore gives a FutEq OI of Rs 50 crore. 100 lots of short put options with a delta of 0.7 and a notional of Rs 100 crore gives a FutEq OI of Rs 70 crore. Gross FutEq OI across both positions = Rs 120 crore.
Traders with large short option books will find their effective exposure is higher under FutEq than it appeared under notional OI.
Net FutEq limit per trader per index: Rs 1,500 crore. Gross cap: Rs 10,000 crore.
Governing circular: SEBI/HO/MRD-PoD2/CIR/P/2024/00181
From April 2026, at least 50% of the total margin required for any open F&O position must be held in cash or cash equivalents. The remaining 50% can come from pledged shares or other approved non-cash collateral.
Before this rule, a trader could meet the full margin requirement through pledged securities alone. That is no longer possible.
Direct impact: If the total margin for an open position is Rs 2 lakh, Rs 1 lakh must be in cash in the account, not pledged shares, not mutual fund units. Cash only.
Source: Budget 2026, announced by Finance Minister Nirmala Sitharaman on February 1, 2026. NDTV Budget 2026 STT report
This is not an SEBI circular. It is a Finance Bill change that took effect from April 1, 2026, and is enforced at the exchange level.
Exact STT rate changes verified from the Ventura Securities STT hike article and ICICI Direct Budget 2026 STT explainer :
Instrument | STT Before April 2026 | STT From April 2026 | Change |
Futures (sell side) | 0.02% of turnover | 0.05% of turnover | Up 150% |
Options premium (sell side) | 0.10% of the premium | 0.15% of premium | Up 50% |
Options on exercise | 0.125% of settlement | 0.15% of settlement | Up 20% |
Rupee impact on actual trades from Ventura Securities:
A Rs 1 lakh futures trade previously attracted Rs 20 in STT. From April 2026, the same trade attracts Rs 50.
A Rs 50,000 options premium trade previously attracted Rs 50 in STT. From April 2026, the same trade attracts Rs 75.
STT is charged on every trade regardless of whether the position is profitable or at a loss. A losing trade and a winning trade of identical size attract the same STT amount. For traders who rely on capturing small premiums frequently, the higher tax directly raises their breakeven on every single position.
NSE unique F&O accounts dropped from 1.06 crore in FY25 to 75 lakh as of December 2025, before the STT hike even came into effect. Market estimates put the expected further decline at 20 to 30% in F&O volumes following the April 2026 rate increase.
Zerodha doubled its intraday F&O brokerage to Rs 40 per order for traders who did not maintain the 50% cash collateral requirement. For a trader placing 15 orders a day, brokerage alone increases from Rs 300 to Rs 600 per day, which amounts to roughly Rs 12,000 to Rs 15,000 in additional monthly costs.
Groww revised its minimum brokerage from Rs 2 to Rs 5 per order on certain trade types following the compliance cost changes. While the per-trade amount looks small, it compounds across an active month of weekly expiry trades.
Both changes are a downstream consequence of SEBI compliance requirements, with brokers passing a portion of their regulatory costs through revised fee structures.
The drop in retail activity is measurable and documented.
Retail F&O participation fell by approximately 20% after November 2024. Retail options premium volume dropped from a peak of Rs 25,000 crore in mid-2024 to around Rs 15,100 crore by February 2025. NSE retail options contracts fell from 397 million in October 2024 to 68 million by February 2025, over 80% in four months.
Across Groww, Zerodha, Angel One, and Upstox, approximately 20 lakh active users exited platforms in 2025, with around 6 lakh leaving in June 2025 alone. The exits were concentrated among small-ticket retail F&O traders.
Priya is a retail trader from Bengaluru who started trading Bank Nifty weekly call spreads in 2022 with Rs 2 lakh of trading capital. A call spread involves selling one call and buying another at a higher strike to cap the maximum loss while collecting a net premium. It is a structured, defined-risk approach.
Her trading setup in mid-2024:
Bank Nifty had a weekly expiry every Wednesday with a lot size of 15. Her Rs 2 lakh comfortably covered one call spread position with a margin buffer. She had four weekly index products available on NSE when Bank Nifty conditions were unclear.
Her situation in June 2026:
Bank Nifty has no weekly expiry on NSE. Only monthly contracts exist. Current Bank Nifty lot size is 30 per NSE FAOP70616. Her only weekly option for index trading on NSE is Nifty 50, which expires every Tuesday with a current lot size of 65.
On expiry day, selling Nifty options triggers the extra 2% ELM per SEBI/HO/MRD-PoD2/CIR/P/2024/00181. With Nifty at 24,500 and a lot size of 65, that is Rs 31,850 in additional margin required on that day.
From April 2026, at least 50% of her total margin must be in cash. If a position requires Rs 1.20 lakh in total margin, Rs 60,000 must be liquid cash.
An Rs 50,000 options premium sale now costs Rs 75 in STT instead of Rs 50, per Ventura Securities STT analysis. That extra Rs 25 per trade accumulates across an active month of weekly Nifty trades.
Her Rs 2 lakh capital can still support a single carefully sized position, but the product landscape she built her strategy around no longer exists. She has one weekly index product instead of four, a higher cash reserve requirement, and higher STT on every trade.
Parameter | Before Nov 2024 | Nov 2024 Change | Current Position June 2026 |
Minimum contract value | Rs 5 to 10 lakh | Raised to Rs 15 to 20 lakh | Maintained at Rs 15 to 20 lakh |
Nifty 50 lot size | 25 | Raised to 75 | Revised to 65 from Jan 2026 |
Bank Nifty lot size | 15 | Raised to 30 | 30 unchanged |
Nifty Fin Services lot size | 25 | Raised to 65 | Revised to 60 from Jan 2026 |
Nifty Midcap Select lot size | 50 | Raised to 140 | Revised to 120 from Jan 2026 |
Weekly experiences on NSE | 4 indices | Cut to Nifty 50 only | Nifty 50 only, every Tuesday |
Expiry day seller margin | Standard ELM | Standard plus 2% extra | Still applies |
Calendar spread on expiry day | Available | Removed from Nov 2024 | Still removed |
Options premium collection | Deferred allowed | Upfront from Feb 2025 | Upfront mandatory |
Position monitoring | End of day | Intraday from Apr 2025 | Intraday plus Rs 5,000 crore FutEq cap from Oct 2025 |
OI calculation | Notional | FutEq from 2025 | FutEq, net cap Rs 1,500 crore |
Cash margin requirement | No split | Not yet | 50% must be cash from Apr 2026 |
STT on futures (sell) | 0.02% | 0.02% unchanged | 0.05% from Apr 2026 |
STT on options premium (sell) | 0.10% | 0.10% unchanged | 0.15% from Apr 2026 |
Suitable for traders who:
Less suitable for traders who:
Between November 2024 and April 2026, SEBI and the Finance Ministry changed every major lever in India’s index derivatives market: contract value, lot sizes, weekly expiry structure, expiry-day margin, calendar spread treatment, premium collection, position monitoring, cash margin split, and STT.
Three things every active F&O trader should verify today: first, that position sizes are calculated on current lot sizes per NSE circular FAOP70616 and not 2024 figures; second, that at least 50% of open position margin is held as cash per SEBI/HO/MRD-PoD2/CIR/P/2024/00181; and third, that strategy profitability has been recalculated using the current STT rate of 0.05% on futures and 0.15% on options premium from Budget 2026.
If you are ready to start trading with a broker that keeps you updated on all regulatory changes, open a free Demat and Trading account with Alice Blue and get access to index futures and options on NSE and BSE with zero account opening charges.
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