India's securities market regulator believes extending the tenure of option contracts can curb excessive speculation. On Thursday, SEBI Chairman Tuhin Kanta Pandey said the regulator is exploring ways to increase the maturity of equity derivatives contracts. But sophisticated traders rarely comply just because regulators tell them to. Reduced leverage and long-term contracts will push activity toward other alternatives such as cryptocurrencies, gold, forex or overseas stock markets, where rapid-fire trading opportunities remain intact.The scale of India’s derivatives market is staggering. In the second quarter of 2024, the country’s two main exchanges handled more than 36.8 billion equity index options, accounting for more than two-thirds of all futures and options traded globally. India built the world's largest derivatives ecosystem, with daily turnover of $3 trillion, only to systematically dismantle it through regulatory action.
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