This isn’t just a rule tweak. It’s a full ecosystem reset.
SEBI is reportedly considering the elimination of weekly expiries in index options, shifting all contracts to a monthly cycle. The regulator’s intent is straightforward: retail investors are losing money, and shorter expiries are seen as encouraging excessive speculation.
But when you listen to traders, brokers, prop desk managers, and sub-brokers—the people who live and breathe these markets every day—a different picture emerges. Banning weekly expiries doesn’t stop losses. Instead, it threatens liquidity, strategy stability, and livelihoods, while leaving deeper structural flaws untouched.
Will Weekly Options Be Banned?
The first issue is instability itself. Rules change too often, participants argued, eroding confidence.
“This is not reform, this is playing with the ecosystem,” said one trader. Strategies are built over years, only to be dismantled with every regulatory shift. This lack of consistency makes it nearly impossible for retail participants to run trading like a business.
Direct Impact on Option Traders
“Theta is our bread and butter. With monthly expiry, only the last week gives us decay. That’s not sustainable for anyone.” said Abhishek, an option seller.
He elaborated:
- Theta decay means an option loses value every day, even if the underlying price doesn’t move.
- In weekly contracts, theta works continuously.
- In monthly contracts, theta accelerates only in the final days—making it unviable for sellers who depend on steady decay.
Weekly expiries attract huge volumes and keep bid–ask spreads tight. Remove them, and liquidity shifts into fewer contracts.
“Less traffic in the market means it’s harder to find the right buyer or seller. The price gap widens, and costs rise for both sides,” Abhishek explained.
Praful added that SEBI’s approach misidentifies the problem: “Intraday volumes in derivatives are far higher than in cash. If you want balance, encourage cash participation, don’t kill derivatives. High charges and taxation keep people away from equities. Options are cost-efficient and flexible.”
Impact on Prop Desk Traders
For prop desks, the stakes are even higher.
“In Delhi NCR alone, thousands depend on weekly expiries. If these end, their bread and butter disappears.”Mayank, a Delhi NCR-based trader, explained
He described how prop firms operate: small traders deploy ₹1 lakh to ₹1 crore, while prop desks deploy anywhere from ₹25 crore to ₹500 crore.
Much of this capital is tied up in weekly option selling, fast premium capture, and intraday adjustments.
Monthly contracts would slow everything down, tie up larger margins, and reduce profitability.
“Over-regulation is killing our market,” Mayank said. “It’s like issuing a driving license and asking us to switch lanes every three months.”
The human cost is significant. Mayank estimated that thousands of traders he personally knows in Delhi alone would lose their income.
And it’s not just traders: analysts, dealers, and risk managers in prop firms depend on the high turnover that weekly options generate.
Instead of bans, Mayank suggested constructive alternatives: mandatory NISM exams to ensure competency and lowering STT.
“If STT is reduced, the percentage of losing traders would fall from 90–95% to 60–65%,” he argued.
Efforts on Rebuilding Strategies
Perhaps the sharpest pain point is the time it takes to build a working strategy—and how quickly regulation can destroy it.
Abhishek shared that he worked for three years on a Bank Nifty strategy, only to be forced into Nifty and Sensex after earlier rules changed. Just as he became profitable, SEBI shifted the goalposts again.
Arun described 8–10 years of sleepless nights experimenting and backtesting before becoming profitable. “One rule change can destroy that edge,” he warned.
Mosin, an option buyer added: “Shifting from weekly to monthly requires fresh backtests, forward testing, capital deployment. Even stop-loss levels and risk–reward ratios need reworking. It’s not the same strategy anymore.”
The collective point was clear: every forced rebuild carries uncertainty, wasted years, and significant opportunity costs.
Impact on Profit Margins
Margins are already thin.
“Since STT is charged on premium, higher monthly premiums mean higher costs. Operational costs rise, revenues don’t—net profit shrinks.” Samakshya explained
Buyers, too, face trouble.
Vivek, an option buyer, explained that shorter weekly contracts allowed for manageable event-based bets. Monthly contracts, with their heavier time value, magnify volatility swings and make outcomes unpredictable.
“It creates uncertain scenarios where you can’t adjust quickly. That’s not reform, it’s disruption,” he said.
Profitable Traders Are the Minority?
Priyanshu pushed back against SEBI’s narrative. “Weekly or monthly, 90% still lose—it’s psychology and education, not the calendar.”
As per the global data: studies from Berkeley and Taiwan show fewer than 20% of day traders are consistently profitable, with up to 85% of new option traders losing money in their first year.
In India, however, option sellers form the majority of consistent earners. Ignoring them risks hollowing out the liquidity base.
“Globally, loss-making is universal. You can remove weekly or monthly, it won’t change. What matters is education and discipline,” he argued.
Rules and Losses Correlation
Other participants agreed that no expiry structure guarantees profitability. “In the U.S., in the U.K., in Pakistan—everywhere, 80–90% lose. That’s not because of weekly or monthly expiries. It’s because speculation without discipline always loses.”
The idea that SEBI can “engineer” profitability by reshuffling expiry cycles was dismissed as naive.
Is SEBI Focusing on the Real Problem?
The most forceful criticism came against SEBI’s focus itself.
“Had you created options on Nifty 500, who can manipulate 500 stocks? Instead, you built Bank Nifty—easy to game. And now you blame retail for losses,” said Keshav, an experienced option seller.
He linked SEBI’s approach to policing by restriction: “Instead of catching thieves, you tell citizens not to step out. That’s not protection; that’s paralysis.”
He argued that India cannot aspire to be the world’s third-largest economy while pulling back on modern instruments. “Mature markets have weekly, even daily expiries. We cannot pretend retail will be saved by banning instruments,” he added
The deeper flaws—narrow index design, high STT, and inadequate investor education—remain unaddressed.
Retail Confidence on SEBI
The policy gap is also a trust gap. “Brokers have an association. Why don’t retail traders have a body to present their case?” asked one participant.
Without representation, retail traders feel regulations are imposed top-down, without consultation or transparency. “If SEBI issues consultation papers, why isn’t there open voting or a transparent system?” asked another.
Movement Towards Crypto and Offshore Markets
An unintended consequence of overregulation is capital flight. “Too many restrictions here, but outside markets are peaceful. Traders will move,” warned one voice.
Already, offshore derivative platforms and crypto exchanges aggressively market themselves as alternatives. Pushing traders out of regulated markets weakens oversight and increases systemic risk.
Impact on Broker Business
Brokers and sub-brokers fear for their business models. They depend on intraday retail churn. Weekly expiries generate fast cycles, frequent trades, and consistent revenues.
Monthly contracts slow that churn, reduce participation, and squeeze profitability.
Smaller brokers, in particular, may face consolidation or closure. Compliance costs rise even as trading activity falls—a double hit that weakens the brokerage ecosystem.
Closing Thoughts
The voices from the market are unambiguous. Weekly expiries are not a speculative gimmick; they are the circulatory system of India’s derivatives market. They keep spreads tight, liquidity flowing, strategies viable, and thousands of livelihoods intact.
Yes, retail investors need protection. But banning weekly expiries is the wrong medicine. It destabilizes strategies, wipes out jobs, increases costs, and risks pushing traders to unregulated markets.
SEBI wants to end weekly expiries on index options to protect retail traders. But for thousands who depend on them—from prop desks in Delhi to individual theta sellers in Ahmedabad—this isn’t a tweak. It’s an existential threat.
If SEBI truly wants to safeguard retail, it should:
- Reduce transaction costs and STT.
- Broaden indices to reduce manipulation.
- Encourage participation in the cash market through incentives.
- Raise entry barriers via education and certification, not bans.
- Above all, provide regulatory stability.
“Weekly expiries should remain, strengthened with safeguards—not eliminated by fiat.” That was the message from every corner of the market floor.
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