India's small investors turn to margin trading after options crackdown

India: India maintains one of Asia's largest and most active equity markets, with its financial regulators focused on balancing growth and investor protection. The Securities and Exchange Board of India (SEBI) has recently intensified efforts to curb speculative retail participation in high-risk options trading through measures such as adjusted settlement mechanisms and margin requirements. In the current news context, these regulatory actions have prompted small investors to shift toward margin trading in underlying stocks. Regulation: India's markets regulator SEBI introduced a closing auction session for derivatives-linked stocks in August 2026 and is now preparing a partial reversal of its use for derivatives settlement following market pushback. Market Shift: Following SEBI's curbs on options trading aimed at reducing retail losses, Indian small investors have increasingly turned to borrowing money for direct stock purchases.