The reforms at a glance
SEBI's 2024–25 F&O reforms addressed lot sizes, expiry availability, margin requirements, and broker-side risk controls. Collectively, these represent the most significant retail-F&O changes in a decade — all aimed at reducing the losses driving the 91% statistic.
Lot size increases
Major F&O lot sizes were raised. NIFTY and Bank Nifty recalibrated upward. The practical effect: you need more margin per contract, which makes it harder to take oversized positions on small accounts. This is explicitly meant to reduce small-account blowups.
Weekly expiry restriction
Weekly options expiries were restricted to one benchmark per exchange. This reduced speculative volume in options, particularly the small-ticket OTM buyers most exposed to theta decay.
Enhanced margin requirements
Peak-margin reporting and intraday margin enforcement were tightened. This limits the 'leverage to the moon' strategies that drove some of the worst retail outcomes.
Broker-side risk controls
Brokers were required to implement additional client-level risk controls around F&O exposure. This adds a layer of protection against the most aggressive discretionary strategies.
Strategic implications
For retail: F&O now requires more capital to trade properly, so the Starter threshold (₹2L+) is more meaningful than before. For platforms: any system that doesn't respect the new framework will break; ours adapted at rule-effective-date with zero user intervention.
What's likely next
SEBI is likely to continue in the same direction — more transparency for retail algo services, potentially more restrictions on predatory product structures, and continued focus on reducing the loss rate. The regulatory trajectory favours systematic, compliant services over predatory product design.
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