F&O volumes hit a record high of Rs 537 trillion in September, but headwinds loom | Stock market today

The average daily trading volume (ADTV) for the futures and options segment hit a new record high of Rs 537 trillion in September, up 7.2 percent on a monthly basis. The ADTV for the cash segment, however, fell by almost 4 per cent to Rs 1.3 trillion. The rise in F&O volumes occurred even as markets recorded stable performance last month. The benchmark Nifty 50 index rose almost 4 percent, while the Nifty Midcap 100 and Nifty Smallcap 100 indices ended the month unchanged in September. However, in the future, F&O volumes may fall due to numerous regulatory hurdles.

Market regulator Sebi on Wednesday announced measures that raise entry barriers for traders, reduce the number of weekly expirations and require initial margin collection. Three of the six measures will come into effect from November 20, two from February 1 and intraday monitoring of position limits from April 1. Besides, Sebi has revised the security selection criteria for stocks eligible for the derivatives segment. The new rules, aimed at ensuring that the most liquid stocks qualify for the derivatives segment, are also expected to result in a churn of the 182 stocks currently available for F&O trading.