SEBI F&O Rules 2026: Lot Size, Weekly Expiry, Upfront Margin and STT Changes Every Trader Must Know
- November 11, 2026
- Posted by: Kunal Singla
- Category: Market
STT on futures is 0.05% and on options 0.15% from 1 April 2026. Index contract value minimum Rs 15 lakh at launch. One weekly expiry per exchange. Option premium collected upfront.
Quick Answer
The SEBI F&O rules 2026 combine regulator changes phased in since late 2024 with a tax change from the Union Budget. Index derivatives now carry a higher minimum contract value, each exchange offers weekly expiry on only one benchmark index, option buyers must pay the premium upfront, and expiry-day margins are stricter. From 1 April 2026, STT rose to 0.05% on futures and 0.15% on options, which raises the cost of frequent trading.
The SEBI F&O rules 2026 are not one single circular but a series of changes rolled out in phases, starting with the regulator’s October 2024 measures and continuing through the April 2026 tax change. Traders who last checked the F&O rules a year ago may be working with outdated assumptions about contract size, expiry and costs.
This guide collects the F&O rules that matter for a retail trader, explains the purpose behind each, and shows how they change the cost and risk of trading index and stock derivatives.
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Why SEBI Tightened the F&O Rules
The rules follow regulator studies showing that most individual traders lose money in equity derivatives. SEBI’s data for FY25 showed that about 91% of individual traders recorded net losses, and index options had grown to account for Rs 41 of every Rs 100 traded by individuals, up from Rs 5 in FY20. The SEBI F&O rules aim to make derivatives less attractive as a quick-gain product and to reduce risk at expiry.
Key Changes Under the SEBI F&O Rules 2026
| Rule | What changed | Effect on traders |
|---|---|---|
| Contract size | Minimum value of index derivatives raised to Rs 15 lakh at introduction, with exchanges revising lot sizes periodically | Larger capital per lot, fewer very small positions |
| Weekly expiry | Each exchange offers weekly expiry on only one benchmark index | Fewer expiry-day speculation choices |
| Upfront premium | Option buyers pay the full premium in advance | No intraday gearing on option buying |
| Calendar spread | No margin benefit for calendar spreads on expiry day | Higher margin on expiry day |
| Expiry-day margin | Extra margin on short option positions on expiry day | Higher cost of selling options near expiry |
| Position limits | Intraday monitoring of index options position limits | Large positions are tracked through the day |
| Pre-open session | Pre-open session introduced for F&O | Smoother price discovery at the open |
| STT | 0.05% on futures sell and 0.15% on options from 1 April 2026 | Higher per-trade cost |
Contract Size and Lot Size
SEBI raised the minimum value of an index derivatives contract to Rs 15 lakh when a contract is introduced, up from the earlier range of Rs 5 to 10 lakh. Exchanges revise lot sizes at regular intervals so that contract value stays within the prescribed band as the index moves. Lot sizes therefore change over time, and the current number for Nifty 50 or Bank Nifty contracts should always be checked on the exchange circular.
Weekly Expiry: One Index Per Exchange
Before the change, several indices had weekly contracts, which attracted heavy retail activity on expiry days. Now each exchange can offer weekly expiry on one benchmark index. Other indices keep monthly contracts. Derivative expiries are also held on a fixed day, Tuesday or Thursday, so that expiries do not cluster on the same day of the week.
Upfront Premium and Margin Changes
Option buyers now have to pay the full premium upfront instead of using broker-provided limits to buy options beyond their cash. Margin for short options on expiry day is higher, and calendar spreads no longer get a margin benefit on the day of expiry. For sellers this raises the capital needed to run short-dated strategies. These F&O rules favour traders who plan margin in advance.
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Position Limits and Pre-Open Session
SEBI introduced intraday monitoring of index option position limits, shifted to a delta-based measure of open interest for some limits, and added a pre-open session for the derivatives segment. The pre-open session lets orders be collected and matched before continuous trading starts, which is meant to reduce wide swings in the first minutes. These new F&O rules also change how large positions are tracked.
The April 2026 STT Hike
Alongside the SEBI derivatives rules, the Union Budget 2026-27 raised Securities Transaction Tax on derivatives from 1 April 2026. STT on the sale of futures rose from 0.02% to 0.05%, STT on the sale of options premium rose from 0.10% to 0.15%, and STT on exercised options rose from 0.125% to 0.15% of the intrinsic value. Delivery and intraday equity rates were not changed.
| Segment | Earlier STT | STT from 1 April 2026 |
|---|---|---|
| Futures (sell side) | 0.02% | 0.05% |
| Options premium (sell side) | 0.10% | 0.15% |
| Options exercised | 0.125% | 0.15% |
On a Rs 13 lakh futures sell trade, the old rate meant about Rs 260 of STT and the new one means Rs 650. That is before brokerage, exchange charges and GST, so strategies with thin margins can turn unprofitable.
What the New F&O Rules Mean for Your Trading
- Plan for a higher capital requirement per lot and lower gearing on option buying.
- Factor the higher STT into your break-even before judging any strategy.
- Check expiry dates and available weekly contracts on the exchange site, as the F&O rules and contracts can change.
- Avoid short option positions near expiry unless you have the margin and risk limits to hold them.
- Treat F&O as a risk product. Position size and stop-loss matter more than ever.
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Conclusion
The SEBI F&O rules 2026 make derivatives more expensive and less geared for small traders, with the aim of cutting the losses that regulator studies keep recording. They do not make F&O safe, and a trader who ignores costs and risk limits can still lose quickly.
Before placing your next trade under the new F&O rules, check the current contract specifications and margin on the exchange website, since lot sizes and expiries can be revised.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data independently before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
What are the new SEBI F&O rules in 2026?
Ans. The new F&O rules include a higher minimum contract value for index derivatives, one weekly expiry per exchange, upfront collection of option premium, stricter expiry-day margins, intraday position monitoring and a pre-open session. The Budget also raised STT on F&O from 1 April 2026.
What is the STT on futures and options from April 2026?
Ans. From 1 April 2026, STT is 0.05% on the sale of futures, 0.15% on the sale of options premium and 0.15% on exercised options based on intrinsic value.
Which index has weekly expiry now?
Ans. Each exchange can offer weekly expiry on only one benchmark index. Check the exchange circular for the current index, since contract details can be revised.
Do option buyers have to pay the full premium upfront?
Ans. Yes. Under the upfront premium rule, buyers must pay the full option premium in advance, which removes intraday gearing on buying options.
Why did SEBI raise the contract size for index derivatives?
Ans. SEBI raised it to reduce excessive speculation by small traders and to ensure that contract values are meaningful relative to the risk. The minimum was set at Rs 15 lakh when a contract is introduced.
Are the SEBI F&O rules applicable to stock derivatives too?
Ans. Several changes, such as the position limits framework and the STT, apply broadly. The contract size, weekly expiry and expiry-day margin measures focus mainly on index derivatives.
Where can I check the latest F&O lot sizes and expiry dates?
Ans. Check the contract specifications and circulars on the official NSE and BSE websites, which publish the current lot sizes and expiry schedules after each revision.
