F&O buying and selling is a zero-sum sport wherein one participant’s loss is one other’s achieve
Yr 2026 goes to be much more difficult for F&O (futures & Choices) merchants, aside from routine identified dangers. Whereas presenting the Funds on February 1, the Finance Minister Nirmala Sitharaman introduced a rise within the securities transaction tax (STT), stating that the transfer would “present an affordable course correction” within the futures and choices (F&O) section whereas additionally producing further income for the federal government.
Accordingly from April 1, 2026, the STT on sale of choices has been hiked from 0.1 per cent to 0.15 per cent on premium; for train of choices it will be 0.15 per cent (0.125 per cent) and on the market of futures 0.02 per cent to 0.05 per cent.
At present, possibility buying and selling — particularly index choices — dominates buying and selling volumes, with extra retail buyers fancying their probabilities there. The share of particular person buyers making losses remained at 91 per cent in FY25, in response to findings by the Securities and Trade Board of India (SEBI).
F&O buying and selling is a zero-sum sport wherein one participant’s loss is one other’s achieve.
A latest Reuters report stated Jane Avenue, which is going through SEBI probe for making undue income by means of ‘manipulating’ Financial institution choices, had made internet buying and selling good points of ₹4,700 crore by means of its arm JSI Funding Pvt Ltd for FY25 and after-tax revenue of ₹2,840 crore.
By imposing a steeper STT improve in F&O, the Finance Ministry is concentrating on the section with the very best focus of speculative retail exercise. In an interview to businessline Sitharaman stated: “We’re not touching STT on the whole. We’re touching solely futures and choices. And that’s the place we’re getting repeatedly, individuals calling us to say individuals are shedding cash. And who’re those shedding cash who usually don’t have that type of a spare money to take a position? So is the federal government supposed to take a seat and watch?,” she stated.
SEBI initiatives
On its half, the regulator had additionally applied a number of necessary measures resembling limiting weekly expiries to only on one index, mountain climbing lot sizes and gathering upfront premiums from merchants. SEBI additionally withdrew good thing about margin necessities for index derivatives on expiry days for calendar unfold technique (utilizing two-month contracts) from final February. And, now the regulator desires to increase the identical for single-stock derivatives as nicely, a step that might improve margin calls for additional to merchants.
These measures have already impacted buying and selling quantity in F&O. Common each day turnover for fairness choices fell 24.6 per cent and 18.2 per cent (y-o-y) in December 2025 for fairness choices and futures respectively, in response to NSE’s knowledge.
In the meantime, Affiliation of NSE Members of India (ANMI) — inventory brokers’ physique — has approached the Finance Minister looking for a rollback and rationalisation of the latest improve in STT, elevating issues over the upper levies considerably rising transaction prices.
Contra views
Some market consultants consider that this transfer won’t curb speculative buying and selling exercise. Zerodha founder and CEO Nithin Kamath Kamath in social media X weblog publish urged that as a substitute repeatedly elevating transaction taxes, regulators ought to contemplate introducing product suitability norms to find out who’s eligible to commerce complicated derivatives. “I do know it’s an unpopular opinion, however this can take away quite a lot of uncertainty amongst brokers and merchants. It’s a significantly better method than a loss of life by a thousand STT hikes,” he stated. He additionally urged STT concession for money section, in order that quantity may shift from F&O to money intra-day offers.
Although these options sound legitimate and logical, one can’t brush apart the loss made by people. For people. it’s extra of a behavioural downside (not accepting the defeat simply), and within the course of proceed to lose increasingly.
Reasonably than imposing extreme restrictions, SEBI may contemplate a brief buying and selling ban — say, for 3 months — if an investor incurs losses in three consecutive trades or ₹25,000 a month.
Revealed on February 6, 2026
