SEBI's new move to cut retailers participation in F&O!
- Thread starter headstrong007
- Start date
Seems that way but they are forcing brokers to check everything. question is, how much leeway brokers will give to their clients.
This proposal btw will taken for discussion on coming meeting sept 18. We would know very soon how is everything going to happen .
https://www.thehindubusinessline.co...-board-meeting-on-sept-18/article24835328.ece
This proposal btw will taken for discussion on coming meeting sept 18. We would know very soon how is everything going to happen .
https://www.thehindubusinessline.co...-board-meeting-on-sept-18/article24835328.ece
Not fully understand this 4%, 2%, 5% idea! Index future ASM raised from 0.50% to 2% means 4 times increase. Is that means Nifty Future NRML from 8% to 10% (2% increase)?
Probably below is the idea!
***************
In case of Out-of-the-money index option contracts, the ASM shall be restricted to 2% only.
For this purpose, Out-of-the-money index options contracts shall be defined as options contracts with strike prices which are out-of-the-money by not less than 5% away from the previous day closing price of the underlying Index.
IMO: That's insane! 5% outside than prev day closing price => OTM strike. 5% is too much. For example, if Bank Nifty is at 28200, then even 29500 CE is not OTM!
So, most of the tradable strikes are not OTM and we need an extra 4% margin to write Index Option. Is that mean half of the current NRML (8%) extra!!
********************
I think SEBI has already done more than enough to limit the exposure. For stock option and future it is 5% increase!!
For Bank Nifty 2% margin increase (from Nov 30) means another 20000-22000 extra for positional margin!
For example current positional margin to for Reliance Future is about 12.5% => 1.6 lakh.
From Nov 30 another 5% increase => 2.25 lakh!
Most of the small retail traders will be out from Stock Future and Options from Nov 30 (5% higher margin), no need to link Networth/ITR.
Probably below is the idea!
***************
In case of Out-of-the-money index option contracts, the ASM shall be restricted to 2% only.
For this purpose, Out-of-the-money index options contracts shall be defined as options contracts with strike prices which are out-of-the-money by not less than 5% away from the previous day closing price of the underlying Index.
IMO: That's insane! 5% outside than prev day closing price => OTM strike. 5% is too much. For example, if Bank Nifty is at 28200, then even 29500 CE is not OTM!
So, most of the tradable strikes are not OTM and we need an extra 4% margin to write Index Option. Is that mean half of the current NRML (8%) extra!!
********************
I think SEBI has already done more than enough to limit the exposure. For stock option and future it is 5% increase!!
For Bank Nifty 2% margin increase (from Nov 30) means another 20000-22000 extra for positional margin!
For example current positional margin to for Reliance Future is about 12.5% => 1.6 lakh.
From Nov 30 another 5% increase => 2.25 lakh!
Most of the small retail traders will be out from Stock Future and Options from Nov 30 (5% higher margin), no need to link Networth/ITR.
Last edited:
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