Day trading will continue to be robust IMO. Physical settlements in stock derivatives will make volumes disappear to a large extent in the final week of expiry in those contracts because most traders will square off their positions a few days before itself to avoid being in a situation where they will have to settle with shares. Rolling over contracts is not the first preference in options trading so it's not like that will change. Of course, Bank Nifty will continue to get the lion's share of volumes in the mid-term unless some other index can compete with it
(Even Nifty hasn't been able to).
Let's be clear about one thing - The liquidity in stock derivatives was never impressive, to begin with. Now, it could worsen further due to the new regulations. The final week of expiry will become untradeable thereby reducing opportunities in the stock options segment. It seems clear that the regulator wants to make stock options a hedgers market.
