To curb speculative trading, market regulator SEBI on Tuesday, October 1, introduced a stricter framework for equity index derivatives, which includes increasing the minimum contract size and mandating the upfront collection of option premiums. Additional measures announced by SEBI encompass intraday monitoring of position limits, the removal of calendar spread benefits on expiry day, rationalisation of weekly index derivatives, and enhanced tail risk coverage. These initiatives are designed to protect investors and ensure market stability, especially during the high-risk environment of index options trading on expiry days. They will be implemented in phases starting November 20, as detailed in SEBI’s circular. This new framework follows a recent study by SEBI on the Futures & Options (F&O) segment.
