SEBI Report Shows Over 50% Drop in Options Trading Volumes in FY26 After F&O Reforms

SEBI's regulatory measures to curb excessive speculative trading in the futures and options (F&O) segment led to a decline in trading volumes during FY26, according to the market regulator's annual report. The measures were aimed primarily at reducing high-risk participation by retail investors. 

The report also highlighted foreign portfolio investor (FPI) activity during the year, which recorded a historic net outflow from Indian equities. Despite this, India emerged as the global leader in the number of initial public offerings (IPOs) during FY26 and ranked third worldwide in terms of IPO fundraising. 

SEBI Measures Reduce F&O Trading Activity 

According to the annual report, the number of options contracts traded on stock exchanges declined by 51.5% during FY26, while futures contract volumes fell by nearly 18%. 

SEBI attributed the decline to a series of regulatory interventions introduced during the year, including: 

While contract volumes declined, the report noted that the options segment recorded growth in both premium turnover and notional turnover. In contrast, the futures segment registered a decline in both premium and notional turnover. 

Read More: How Paying ₹1 Lakh Extra Every Year Can Reduce Your Home Loan Tenure by More Than 15 Years and Save Over ₹35 Lakh 

FPI Outflows Hit Record High in FY26 

The annual report showed that foreign portfolio investors recorded a net outflow of more than ₹1.5 lakh crore during FY26, the highest on record. 

FPIs were: 

The report also highlighted that FPIs invested ₹70,822 crore in the primary market but sold more than ₹2.5 lakh crore worth of shares in the secondary market. 

Sector-wise, FPIs were net buyers in: 

They remained net sellers in: 

India Emerges as Global IPO Leader 

SEBI's report stated that India recorded the highest number of IPOs globally during FY26. In terms of capital raised through IPOs, the country ranked third worldwide, highlighting continued activity in the primary market despite volatility in secondary markets and foreign investor outflows. 

Conclusion 

SEBI's FY26 annual report indicates that regulatory changes significantly reduced speculative activity in the F&O segment, resulting in lower trading volumes. At the same time, India maintained strong momentum in the primary market by leading the world in IPO count, even as FPIs recorded a record net outflow from Indian equities. 

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