Pranamya Luniya’s Post

Big Change in the F&O Market ⚠️  SEBI has introduced a new Index Derivative Framework. The first phase of these reforms is already live as of November 21, 2024, with more changes rolling out in 2025. From increasing contract sizes to rationalizing weekly expiries, these measures are set to make trading more responsible and structured.  Swipe through the carousel to understand what’s changing and how it impacts traders.  Let us know your thoughts in the comments!  #SEBI #FuturesAndOptions #IndexDerivatives #Investing #AppreciateWealth

SEBI RELEASES NEW RULES FOR EQUITY DERIVATIVE SEGMENT || SEBI INCREASES THE MINIMUM TRADING AMOUNT FOR DERIVATIVES FROM 500,000 RUPEES TO 1.5 MILLION RUPEES SEBI REDUCES EXPIRIES OF DERIVATIVES CONTRACT TO ONE PER EXCHANGE PER WEEK || SEBI - NEW MEASURES FOR DERIVATIVES TRADING TO BE EFFECTIVE || SEBI ASKS EXCHANGES TO MONITOR INTRADAY POSITION LIMITS FOR EQUITY INDEX DERIVATIVES SEBI - UPFRONT COLLECTION OF OPTIONS PREMIUM AND INCREASED MARGINS TO BE EFFECTIVE FEB 2025 || SEBI MANDATES ADDITIONAL MARGIN REQUIREMENT OF 2% FOR SHORT OPTIONS CONTRACTS ON DAY OF OPTIONS EXPIRY

Market regulator Sebi has announced an upward revision in the position limits for trading members in the index futures and options (F&O) contracts. As per the new dictate, position limits for trading members, cumulatively for client and proprietary trades, in index F&O contracts are now set at Rs 7,500 crore or 15 per cent of the total open interest (OI) in the market, whichever is higher. Earlier it was Rs 500 crore or 15 percent of the total OI in the market. The limits are 30 times higher than the current limit for brokers. Read More: https://ow.ly/468g50TMj4w Annurag Batra | Noor Fathima Warsia | Tanvie Ahuja #FinancialNews #StockMarket #TradingUpdates #SebiRegulation #MarketTrends #InvestingTips

*SEBI TIGHTENS DERIVATIVE NORMS AS PER THE CONSULTATION PAPER* * SEBI RELEASES NEW RULES FOR EQUITY DERIVATIVE SEGMENT * SEBI INCREASES THE MINIMUM TRADING AMOUNT FOR DERIVATIVES FROM 500,000 RUPEES TO 1500,000 RUPEES * SEBI REDUCES EXPIRIES OF DERIVATIVES CONTRACT TO ONE PER EXCHANGE PER WEEK * SEBI ASKS EXCHANGES TO MONITOR INTRADAY POSITION LIMITS FOR EQUITY INDEX DERIVATIVES * UPFRONT COLLECTION OF OPTIONS PREMIUM AND INCREASED MARGINS TO BE EFFECTIVE FEB 2025 * SEBI MANDATES ADDITIONAL MARGIN REQUIREMENT OF 2% FOR SHORT OPTIONS CONTRACTS ON DAY OF OPTIONS EXPIRY.

SEBI has introduced stricter regulations for derivatives: - The contract size for index derivatives has been increased to Rs 15-20 lakh, up from the current Rs 5-10 lakh. - Each exchange is limited to offering only one weekly index expiry. - Exchanges are now required to monitor intraday positions more closely. - An additional margin will be imposed on short options contracts on the day of expiry. - The premium must be collected upfront. These changes will be implemented according to different timelines.

On October 1, 2024, SEBI released a circular that changes a few things for index derivatives. Here’s a breakdown of all the changes and their impact. Increase in contract size Currently, the contract size for index F&O contracts is between Rs. 5 lakhs to 10 lakhs. Starting November 20, 2024, the contract value will be increased to between Rs. 15 lakhs to Rs. 20 lakhs. This will increase the lot size for index F&O contracts and will also result in increased margin requirements in the same proportion. The increase in lot size could also result in existing positions in longer-dated options trading as odd lots. This will specifically impact longer-dated Nifty options, as the new lot size won’t be a simple multiple of the current one.

SEBI introduces major changes in index derivatives to curb speculation among retail investors, including hike in contract size and upfront options premium collection. Visit https://lnkd.in/d2UqSrsk to know more about this #SEBI #IndexDerivatives #Speculation #RetailInvestors #ContractSize

In a decisive move to enhance investor protection and market stability, SEBI has announced a series of measures to strengthen the index derivatives framework. Check our blog for more information! https://zurl.co/WEmc #SEBI #IndexDerivatives

Discussion on Consultation Paper by SEBI regarding Strengthening the Index Derivatives Framework. SEBI's proposed measures are set to make a notable impact on retail traders: Liquidity and Fair Pricing: Concentrated trading is expected to enhance liquidity and promote fairer pricing. Encourages Safe Trading: Requiring upfront premium payments will prompt traders to have funds readily available, reducing risky trades. Higher Capital Requirements: The proposed increase in margins and contract sizes will necessitate more capital, potentially posing challenges for smaller traders. Nonetheless, it aims to foster safer trading practices. Market Stability: Continuous position monitoring and curbing speculative trades close to expiry aim to prevent abrupt market fluctuations. Simplified Product Offerings: The focus on a single index for weekly options will streamline trading, albeit with a reduced range of choices. These regulations prioritize trader protection and market stability. Adapting trading strategies will be crucial for success in this evolving landscape. #SEBI #RetailTraders #MarketStability #InvestorProtection #Fintech #Trading

Finally, the much-anticipated SEBI circular on derivatives is out! 🚀 Here’s a quick breakdown of the 6 major updates: 1. Upfront Collection of Option Premium: Starting February 1, 2025, options buyers will need to pay the full premium upfront. 2. Removal of Calendar Spread Treatment on Expiry Day: From February 1, 2025, calendar spread benefits will no longer apply on expiry days. 3. Intraday Monitoring of Position Limits: Beginning April 1, 2025, exchanges will monitor position limits throughout the day. 4. Recalibrated Contract Size: Starting November 20, 2024, the minimum contract size for index derivatives will increase to Rs. 15 lakhs. 5. Rationalization of Weekly Derivatives: Effective November 20, 2024, each exchange may offer derivatives contracts with weekly expiry for only one of its benchmark indices. 6. Increase in Tail Risk Coverage: 2% extra margin (ELM) will be applied to short options on expiry day, starting November 20, 2024. #SEBI #Derivatives #FnO