Every major SEBI derivatives rule change since October 2024 — Tuesday and Thursday expiries, FutEq open interest, new MWPL, ban period rules and PAN-level caps.

Between October 2024 and December 2025, SEBI rewrote large parts of how India’s equity derivatives market works. Expiry days moved. Open interest is now measured differently. Position limits are calculated from cash market liquidity rather than from notional exposure.

If you last learned these rules two years ago, most of what you know about lot sizes, expiry timing and ban periods is out of date. Here is the current picture, grouped by what it changes for you.

Part 1: Expiry Days Have Moved

What changed

SEBI’s May 2025 circular mandated that all equity derivative contracts — weekly, monthly, quarterly and longer — must expire on either a Tuesday or a Thursday. Each exchange chose one day for its benchmark weekly index option, subject to SEBI approval.

Effective 1 September 2025:

This ended a 25-year convention where Thursday meant expiry. Contracts expiring on or before 31 August 2025 kept their original dates; everything after followed the new schedule.

If the expiry day is a trading holiday, expiry moves to the previous trading day.

Why it matters practically

• Weekly decision windows shifted. On NSE, the Nifty weekly option decision now sits at the start of the week rather than at the end.
• Expiry-day volatility is now distributed across two days rather than concentrated on one.
• Any strategy, spreadsheet or automation built around Thursday expiries needs rewriting.

Part 2: Open Interest Is Now Delta-Based

This is the most technically significant change, and the most misunderstood.

The old method

Notional open interest simply added up the contract value of all open futures and options positions, regardless of how sensitive they were to the underlying price.

That treated a deep out-of-the-money option — which barely moves when the stock moves — as identical in risk to a futures contract. It was a poor measure of actual exposure, and it pushed stocks into ban periods for reasons unrelated to genuine risk.

The new method: FutEq OI

Open interest is now measured as Future Equivalent (FutEq) open interest, calculated using delta — the sensitivity of an option’s price to a one-rupee move in the underlying.

The worked example: hold 100 long call contracts with a delta of 0.5, and your exposure is treated as 50 futures equivalents, not 100 contracts.

Positions are netted at portfolio level per client, and the gross addition of net FutEq OI across all unique client codes forms the FutEq OI for that stock or index. Clearing corporations publish this for every scrip.

Why it matters

• Risk is measured by actual price sensitivity rather than headline contract count
• Fewer stocks enter ban periods for artificial reasons
• Hedged books are treated more accurately than under notional counting
• Mutual funds and AIFs must also calculate long and short option positions on the FutEq basis

Part 3: Market-Wide Position Limits Rebuilt

Linked to real cash market activity

MWPL for single stocks is now linked to cash market volume and free float, rather than to a formula disconnected from liquidity. The relevant cap was revised to the lower of 15% of free float or 65 times the average daily delivery value in the cash market — representing roughly three months of trading.

The reduction from 20% to 15% reflects the fact that measured open interest is lower under the FutEq method.

Practical effect

Illiquid or low-free-float stocks now carry smaller derivative position limits. Highly liquid stocks carry limits proportionate to actual turnover. The intent is that derivative exposure cannot vastly exceed what the underlying cash market can absorb.

Part 4: Ban Period Rules Have Changed

Previously, when a stock crossed 95% of MWPL it entered a ban period and, in theory, no new positions could be created.

Under the current framework, trades are permitted during ban provided they reduce delta-based open interest on an end-of-day basis. SEBI’s example: if your delta position is +10 at the end of day one, it can be reduced towards zero by end of day two.

Two clarifications matter:

• Flipping the sign of delta does not count as a reduction. Going from +10 to −10 is not a reduction.
• Passive increases in FutEq OI caused by movement in the underlying scrip are not treated as a breach. Your delta changes as the stock moves; that is not your action.

Clearing corporations and exchanges track delta positions daily.

Part 5: Entity-Level Position Limits

Index options

Applied per PAN, phased in between July and December 2025:

• Net end-of-day FutEq position: ₹1,500 crore
• Gross long and gross short: ₹10,000 crore each

Index futures

Tiered by participant category, generally computed as the higher of a specified percentage of market-wide open interest or a fixed rupee amount. Mutual funds and trading members (proprietary or client) can hold the higher of 15% of market-wide OI or ₹500 crore; other categories such as corporates and family offices, the higher of 10% or ₹500 crore.

These caps affect institutions, not typical retail traders directly — but they change how much size can concentrate in a single index, which affects liquidity and expiry-day behaviour for everyone.

Part 6: Monitoring and Market Structure

• Intraday MWPL monitoring: exchanges must conduct at least four random intraday checks per session, rather than relying on end-of-day snapshots.
• Non-benchmark index derivatives: tighter eligibility — such an index must have at least 14 constituents, with limits on the weight of the largest constituent, to prevent concentrated single-stock exposure disguised as an index product.
• Pre-open session for derivatives: introduced to align with the cash market structure.

Part 7: The October 2024 Measures Still In Force

The earlier framework, effective from 20 November 2024, remains the foundation:

• One weekly benchmark index expiry per exchange
• Increased contract lot sizes, raising the minimum capital needed per trade
• Upfront collection of option premium from buyers
• Removal of calendar spread benefit on expiry day
• Additional margin on short options on expiry day
• Intraday position limit monitoring

What All of This Means for a Retail Trader

Capital requirements are higher. Larger lot sizes mean each position ties up more money, and the minimum viable account size has risen.

Expiry timing needs relearning. Tuesday for NSE, Thursday for BSE. Automation and habits both need updating.

Ban periods behave differently. You can act during a ban, but only to reduce delta-based exposure — and the mechanics can complicate hedge adjustments.

The intent is explicit. SEBI’s own findings sit behind these rules: roughly 91% of individual traders in equity derivatives incurred net losses in FY25, with aggregate net losses of about ₹1.06 lakh crore, up 41% on FY24. The measures reduced participation and turnover; they did not change the loss ratio.

If you trade the segment, verify current lot sizes, margin requirements and expiry dates on the NSE and BSE contract specifications before every cycle. These parameters have changed repeatedly and will change again.

Frequently Asked Questions

When did NSE move to Tuesday expiry?

For contracts expiring from 1 September 2025 onwards. Contracts expiring on or before 31 August 2025 kept their original Thursday dates.

What happens if expiry falls on a holiday?

Expiry shifts to the previous trading day. Check the exchange holiday calendar each month.

Does delta-based OI change my margin?

Margins are computed under the standard SPAN and exposure framework. FutEq OI changes how position limits and ban triggers are measured, not the margin formula itself.

Are these rules final?

SEBI has issued measures in successive phases since October 2024 and continues to monitor the segment. Always verify against the latest circulars on sebi.gov.in and the exchange notices.

Sources and Further Reading

• SEBI circular dated 1 October 2024 — measures to strengthen the index derivatives framework
• SEBI circular dated 29 May 2025 — risk monitoring in the equity derivatives segment
• NSE and BSE exchange circulars on revised expiry schedules, effective 1 September 2025
• SEBI study on individual traders in the equity derivatives segment (FY25)