Based on the measures suggested by an expert panel, SEBI has proposed the following measures for adoption by stock exchange, here are some things to know.
1
SEBI suggests a uniform strike interval near the prevailing index price of 4% around the prevailing price.
2
To prevent undue intraday leverage and discourage market practices of allowing positions beyond collateral.
3
SEBI proposes removing margin benefits for calendar spread positions involving contracts expiring on the same day.
4
SEBI advises that position limits for index derivative contracts be monitored intraday by clearing corporations/stock exchange.
5
SEBI proposes increasing the minimum value of derivatives contracts from Rs 5-10 lakh to Rs 15-20 lakh initially.
6
SEBI suggests limiting weekly options contracts to a single benchmark index per exchange.
7
To address high implicit leverage risks near expiry, SEBI recommends increasing the Extreme Loss Margin (ELM) by 3-5%.