SEBI has introduced stricter regulations for derivatives trading, aiming to enhance market stability and reduce risk
Contract Size for Index Derivatives Raised: The minimum contract size for index derivatives will be increased to ₹15-20 lakh, up from ₹5-10 lakh. This makes trading in these instruments suitable for larger participants, aiming to reduce speculative trading.
One Weekly Index Expiry Rule: SEBI has capped the number of weekly index expiries to just one per exchange. This move is expected to streamline trading and minimize market volatility.
Intraday Position Monitoring: Exchanges are now required to monitor intraday position limits actively. This will prevent excessive risk-taking and improve market discipline.
Upfront Option Premium Collection: To ensure better risk management, option premiums must be collected upfront from buyers starting February 2025. This step discourages speculative behavior in options trading.
Additional Margin for Expiry-Day Short Options: Traders holding short positions on options during expiry will face stricter margin requirements, providing more security to the market against sudden moves.
These tighter rules emphasize SEBI’s commitment to maintaining a more stable and secure market environment. By raising contract sizes and introducing stronger monitoring, SEBI ensures that the derivatives market attracts more serious players while curbing excessive speculation. With the upcoming changes, traders and investors must stay informed and adjust their strategies accordingly.