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Excitement and worry as stock options trading booms in India 


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. 

Market Impact

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.

Article Tags

Topics of Interest: EconomyGovernment

Type: Reuters Best

Sectors: Business & FinanceEconomy & PolicyGovernment & Public Services

Regions: Asia

Countries: India

Win Types: Exclusivity

Story Types: Exclusive / Scoop

Media Types: Text

Customer Impact: Significant National Story

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