The first expiry after the Securities & Exchange Board of India’s (Sebi) action on high-frequency trader Jane Street led to a fall in trading activity in NSE’s derivatives contracts to April-end level, data showed on Thursday. Experts said Sebi’s stringent actions resulted in a significant decline.
According to data, the number of index options contracts traded has fallen 21.2% to 247 million from the previous expiry day after which the order came. This is the lowest level since April 30 expiry. Due to this, the total number of contracts traded across futures and options of the index and stocks has fallen by 21% to 252 million.
According to Osho Krishan, chief manager, technical and derivatives research at Angel One, a majority of counters like Jane Street have restricted their turnover due to stringent regulatory approach, and retail participants don’t have the expertise, so they trade at near money contracts.
The notional expiry day turnover in index options contracts on the NSE fell 21% from previous expiry to Rs 472 lakh crore. The average expiry day turnover in June was Rs 564 lakh crore. The premium turnover declined 25% from the previous expiry to Rs 45,884 crore.
While Sebi has said there should not be a major impact from this action, it has increased surveillance measures. Krishan said, the volumes they generate result in very strong liquidity.
The Sebi order had noted that even after the NSE’s caution, disturbingly, on days such as on May 15, 2025 (an expiry day for NIFTY weekly options), JS group was seen not only running very large effective cash-equivalent long positions via NIFTY index options, it was also seen to be intervening heavily in Nifty futures and Nifty constituent stock futures at close to expiry.
On May 15, the number of traded contracts in index options were 329 million, notional turnover stood at Rs 612 lakh crore and the premium turnover was at Rs 95,584 crore, significantly higher compared with Thursday.
The monthly expiry day of Nifty Bank contracts will be crucial to watch as the regulator had found multiple instances of index manipulation in those contracts. Some experts also believe this action will clean the derivatives market.