In future can trading in fno can be banned??

Hello traders

I know it is stupid question but in future is it possible than sebi can ban trading in future and options…

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Not a stupid question at all.

My Opinion would be that it is very unlikely to ever happen. Derivatives help in price discovery and help to understand the consensus of the markets at any given point in time. It has a very important role to play in the markets in terms of liquidity, risk management, speculation, and hedging.

All that without even factoring in that the derivatives market is about 100-120 times the size of the Global Economy. So derivatives cannot be phased out without the risk of collapsing the economic machine.

However, increased restrictions on who can trade in derivatives can certainly be brought in the future. Many people are not financially and knowledge wise ready to trade derivatives yet still come in hopes of making windfall gains, although this true for stocks as well, but the downside there is usually capped to the extent of your holdings and happens over a longer period of time which allows for multiple exit points.

So yeah some of the speculative crowd who don’t know what they are doing in the derivatives markets can surely be curtailed as per the increased regulatory measures we have seen.

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Not possible. Future and forward contracts are not just any random gambling method. They are time evolved trading instruments used for hedging


(Minimum words required to post :stuck_out_tongue_winking_eye::stuck_out_tongue_winking_eye:)

US government had previously tried to regulate it, but failed to do so because of the successful lobbying of the financial institutions in USA. Financial innovations will keep happening and the hedge funds and financial institutions will keep getting richer. As India follows US in most cases, the chances of getting banned is nil, and chances of getting regulated is low too.

Anything can happen but probability of it happening is pretty low as mentioned in earlier posts.

Thanx for reply…

But is it possible in future sebi can ban retail traders to trade in FNO??? And allow only big client to trade

No, then who will be on the losing side of the trades then :slight_smile:

Jokes aside, no Gaurav I think it will be very unlikely, exchanges have worked for years on trying to develop a vibrant derivatives market in India. Indian derivatives market although relatively smaller in comparison to US, but are the best among the developing nations. Retail participation in the F&O segment has averaged between 10 -18% of total turnover in the last decade and is only growing. New tradable products and indexes are continuously being added on the exchanges. Newer technologies has given even the smallfish the tools which even Hedge Funds didn’t have in the previous decade.

Outright banning would be undoing all those years of progress for no valid reason. Also SEBI doesn’t has to blanket ban retail, if it wants to manage/restrict retail participation it can do it simply by bringing regulations so hardcoded that it makes trading F&O unviable for a large number of people.

So I think it is very unlikely to happen atleast in the forseeable future.