SEBI Expands Derivatives Market

Starting April 1, 2026, traders can access futures and options contracts for Adani Power, Cochin Shipyard, Hyundai Motor India, Motilal Oswal Financial Services, Nippon Life India Asset Management, and Vishal Mega Mart. The National Stock Exchange (NSE) announced this addition, which is subject to the stocks meeting eligibility criteria based on the March 2026 computation cycle. This expansion follows a revision of F&O eligibility norms by SEBI on August 30, 2024. The regulator significantly increased the requirements for a stock's median quarter-sigma order size, market-wide position limit, and average daily delivery value to qualify for the derivatives segment. The stricter criteria were introduced because the average market size, turnover, and delivery values had roughly tripled since the framework was last updated in 2018. To be included, stocks must be among the top 500 in terms of average daily market capitalization and traded value over the last six months. The inclusion of these stocks is anticipated to increase their trading activity and liquidity. The availability of derivatives contracts often attracts institutional traders and hedge funds, who use these instruments for hedging, speculation, and implementing advanced trading strategies. The market lot sizes and strike price schemes for the new additions will be detailed by the exchange on March 30, 2026. This will provide market participants with the necessary contract specifications to prepare for the start of trading. This development occurs as the government considers an increase in the Securities Transaction Tax (STT) on derivatives. A proposed hike could raise trading costs for active F&O participants and potentially impact overall market liquidity.