Are SEBI’s new F&O rules successful in curbing Indian stock market’s volatility? Experts weigh in

However, the efficacy of these changes is now being questioned by experts, as they anticipate some unintended consequences.Earlier this year, the Securities and Exchange Board of India announced new rules to tackle high volatility in the derivatives market and safeguard the interest of retail investors. Impact on Retail Traders Retail investors, who are often drawn to the quick profit potential of F&O trading, may also face challenges due to the increased costs and reduced flexibility brought about by the new rules. Pranay Aggarwal, CEO of Stoxkart, believes that while the changes might reduce volatility in indices and push some retail traders toward cash trading, ongoing geopolitical tensions could continue to affect investor sentiment. However, Narinder Wadhwa, Managing Director & CEO of SKI Capital, said that while retail investors could face challenges due to increased costs, disciplined trading might benefit them in the long run, acknowledging that the rules could reduce speculative losses. Institutional Dominance One significant concern raised by several analysts is that the new rules may favour institutional investors over retail traders.