13 November 2023, 1:37 pm 1 minute
Reuters exclusively reported a sudden explosive growth in stock options trading in India this year has got the country’s retail traders excited and regulators worried about the risks such speculative fervour could spawn. The boom in derivatives trading in the country’s historically conservative markets, where some products such as stock futures are still too expensive, has come after stock exchanges changed some options contracts to facilitate quicker and cheaper bets and as online retail trading platforms mushroomed.
Axis Mutual Fund estimates there are 4 million active derivatives traders in the country. The traders are mostly small players, according to SEBI data. Axis said in a report there is as much as 500 times leverage on some options, meaning a 2,000 Indian rupees ($24.01) bet gives the option holder 1 million rupees worth exposure, and often retail investors were holding these bets for just 30 minutes on average.
Topics of Interest: EconomyGovernment
Type: Reuters Best
Sectors: Business & FinanceEconomy & PolicyGovernment & Public Services
Win Types: Exclusivity
Story Types: Exclusive / Scoop
Media Types: Text
Customer Impact: Significant National Story