Finance Minister Nirmala Sitharaman said the increased Securities Transaction Tax on F&O trading targets excessive speculation while safeguarding retail investors from rising financial losses.

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• Finance Minister Nirmala Sitharaman clarified that the STT hike on futures and options trading is intentionally designed to discourage excessive speculative behaviour in markets.

• She shared receiving concerns from parents whose children suffered repeated losses in derivatives trading, highlighting growing risks faced by inexperienced retail investors.

• Sitharaman described futures and options as highly speculative instruments where leverage amplifies both gains and losses, disproportionately harming small retail participants.

• Citing SEBI studies, she said nearly 90–93 percent of individual F&O traders end up losing money consistently despite continued participation.

• Earlier research also showed over 75 percent of loss-making traders continue derivative trading, increasing household financial vulnerability and long-term savings erosion.

• Under Budget 2026–27, STT on futures increased to 0.05 percent, while options premium and exercise-related STT rates were moderately raised.

• The government noted derivatives trading volumes exceed 500 times India’s GDP, signalling excessive speculative activity detached from underlying economic fundamentals.

• Chief Economic Advisor stated the objective is protecting household savings and reducing systemic risk, not revenue generation, calling the move a necessary market correction.