New Delhi, June 30 -- Retail investors turned surprisingly active in India's tepid exchange-traded commodity derivatives (ETCD) segment during the West Asia conflict, in the backdrop of regulatory curbs on rupee speculation that took effect two years ago.

Market observers said wartime volatility prompted more retail investors to hedge their underlying exposure, in line with a Reserve Bank of India (RBI) circular dated 5 January 2024. The circular had said that users could trade up to $100 million across currency pairs like dollar/euro/British pound and yen versus rupee across all stock exchanges-but only if they could establish the existence of unhedged underlying obligations to buy or sell forex if required.

The recent jump in retail p...