The National Stock Exchange (NSE) has experienced a sharp 35% drop in index options premium turnover following the July 4, 2025, ban on U.S.-based trading giant Jane Street by India’s financial regulator SEBI. This decline has sparked worries about falling liquidity and weakened confidence in the Indian derivatives market.
The average daily turnover in index options fell from over ₹60,000 crore in June to ₹39,625.77 crore on July 17, according to NSE data
🔍 What Caused the Drop in NSE Options Turnover?
1. Jane Street’s Exit
Jane Street was a top liquidity provider and active participant in India’s options segment. Its sudden ban led to a significant vacuum in market-making activities. This lack of counterparties has slowed down trading volumes across the board.
2. Low Volatility Environment
With the Nifty 50’s volatility index at yearly lows, traders have fewer opportunities to profit from swings. This calm market further reduced trading interest.
3. Wider F&O Slowdown
Both NSE and BSE reported significant declines in futures and options trade. BSE’s premium turnover also plunged 36.4% since July 4 Reuters
📊 Market Stats Since Jane Street Ban
| Metric | Before (June Avg.) | After (July 17) | % Change |
|---|---|---|---|
| NSE Index Options Turnover | ₹60,605 Cr | ₹39,625.77 Cr | -35% |
| BSE Options Turnover | ₹1,760 Cr | ₹1,121.79 Cr | -36.4% |
| Nifty Volatility Index | 13.8 | 11.1 | -19.6% |
📈 Industry Reactions & Expert View
Market analysts say this disruption highlights the fragile dependency on key liquidity players. “The market is seeing a short-term shock. As volatility returns or new players fill the void, activity could rebound within 4–6 weeks,” a Mumbai-based trader told Reuters.
Others argue that SEBI’s strict stance, while necessary for transparency, could push away sophisticated global players unless clearer frameworks are established.
🔮 What Lies Ahead for NSE Options Turnover?
- Possible Recovery: Experts predict volumes could recover in August or September if volatility picks up.
- Watch SEBI Policy: Further rules or restrictions could impact the comeback of foreign or algo-driven traders.
- Retail Participation: New initiatives might be needed to boost retail trading to stabilize volumes.
🏦 About NSE & Jane Street
The National Stock Exchange (NSE) is India’s largest stock exchange and among the world’s top in derivatives volumes.
Jane Street Capital is a global quantitative trading firm headquartered in New York, known for its high-frequency and options strategies.
The July 2025 ban came after SEBI alleged that Jane Street manipulated index prices using complex trades across spot and derivatives markets.
