Sebi may link options leverage to cash holdings in bid to curb retail losses: Report

The Securities and Exchange Board of India (Sebi) is reportedly considering a formula-based mechanism to link leverage in options trading to investors' cash positions, according to CNBC-TV18 sources.

The proposed move aims to curb excessive speculation, enhance retail investor protection and shift some focus back to the cash market -- potentially boosting its liquidity while cooling down the overheated options segment.

Additionally, Sebi is said to be evaluating further measures to restrict retail participation in the options segment.

Separately, Sebi may expand its ongoing investigation into US-based proprietary trading firm Jane Street to include additional indices amid concerns over possible market manipulation.

The regulator last week barred Jane Street and its associated entities including Jane Street Singapore and JSI Investments, from accessing the domestic securities market, amid alleged unlawful gains amounting to Rs 4,843 crore.

Following the ban, Jane Street said it would fully cooperate with Sebi, affirming its commitment to regulatory compliance globally.

Notably, a recent Sebi study revealed that nearly 91 per cent of individual traders in India's equity derivatives market suffered losses during FY2025.

Sebi's study observed that a similar pattern was seen in FY2024. In FY2025, net losses for individual traders surged 41 per cent to Rs 1,05,603 crore, up from Rs 74,812 crore in FY2024.

The number of unique individual investors in the futures and options (F&O) segment fell 20 per cent year-on-year (YoY). However, over the past two years, the overall number of such investors grew by 24 per cent. Meanwhile, index options turnover declined 9 per cent in premium terms and 29 per cent in notional terms on a YoY basis.