Sebi Update: Index Derivatives Contract Size Raised to ₹15 Lakh from Nov 20 – Here’s What You Need to Know

The Securities and Exchange Board of India (Sebi) has increased the minimum contract size for index derivatives to ₹15 lakh, up from the current range of ₹5-10 lakh. This change will apply to all new index derivative contracts introduced after November 20, 2024.

In Sebi’s circular from October 16, 2023, the previous contract sizes were between ₹5 lakh and ₹10 lakh for both index futures and options. However, with the market growing significantly since the last update in 2015, Sebi decided to raise the contract size. Now, the contract value should be between ₹15 lakh and ₹20 lakh on the day of review.

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Sebi stated that the increase is meant to reflect the growth in the market and ensure participants are suitable for trading in derivatives, which involve high risk due to leverage.

A Sebi study showed that retail traders are losing significant money in options trading. Over the last three financial years (FY22-FY24), 1.13 crore retail traders in Futures & Options (F&O) lost a combined total of ₹1.81 lakh crore. On average, each loss-maker lost ₹2 lakh, while profit-makers gained an average of ₹3 lakh per person.

The decision follows a Sebi board meeting where new investment opportunities were also discussed, allowing high-net-worth individuals to invest in riskier products with a minimum of ₹10 lakh.