Key Points
In order to protect investors' interest and cut down on speculative trading, capital market regulator Sebi came down heavily on the derivatives market by announcing a series of measures...
The six-step framework is designed to tackle the surge in speculative trading volumes, especially on expiry days, while also acting as a potential deterrent for retail investors engaging in F&O trading...
These include 1) Upfront collection of options premiums 2) intraday monitoring of position limits 3) Removing calendar spread benefits on expiry day 4) Increasing the contract size for index derivatives 5) Rationalizing weekly index derivatives to one benchmark per exchange and 6) Enhancing margin requirements on options expiry days.. 2) How does rationalizing weekly index derivatives affect market dynamics?..
Sebi's decision to mandate upfront collection of options premiums is aimed at curbing the high leverage that retail investors often use when trading in the options segment..
We could witness a gradual shift from F&O trading to equity trading and investments, which will lead an investor on the path towards building long-term wealth," said Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities...
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