Derivative exposure based on Income tax returns for retail traders - Outcome from latest SEBI board meeting


The SEBI step is not good rather SEBI should reduce lot size


Very good move by SEBI.

I applaud them.

They should take more stringent measure to curb retail trader participation in derivative segment.


Everything is gng on Demonetisation mode! :expressionless:

Based on the latest MWPL & LTP, 20 stock derivatives might get into Physical settlement mode to satisfy market wide limit of 500Crs condition. I don’t know how many to satisfy 10Cr of Delivery value condition.:roll_eyes:

I dont think this will take effect from Monday(Apr2nd) as already much positions hv got rolled over to April n May series. As June series starts from Apr2nd, it might be applicable from that series.

Similar to Zerodha 60-day challenge, SEBI has given 365-day challenge to all Full time traders. If one can’t become profitable & show as income in the ITR, one cannot get the exposure limit back! :wink: :laughing:


Here in India, no one to stop big banks from using public money to lend way beyond recoverable limits. And some SEBI investor protection cell employee’s brain is working overtime on his job KRA to babysit retail investors. As someone has aptly commented …it’s SEBIs 365day challenge.


This is a draconion measure by SEBI and they should be banned for trying to protect illiterate traders at the expense of literate traders. Clearly some Big players have influenced SEBI"s decision. If SEBI is so compassionate, than why not reduce lot size? Thugs masquerading as protectionist.


It may not be a good move and may work in opposite

Probably this does not affect options buying because no margins are provided by brokerage and only premium amount is used from margin.

Probably retail option seller’s may need more margin so small retailers cannot implement strategies that involves selling options

So retailers may buy options and may not sell them due to high margin requirements. This will result in losing more money than they are losing now in market


If my income declaration in ITR is 5L, then will i be able to trade 6 lots reliance future with 6L as capital? Or would they limit me saying 6 lots of reliance equals 60L value (approx,) hence not allowed to trade as it is more than declared income.
Also, is it exposure at any given time or total exposure on a yearly basis?

i guess till the complete set of rules are out, severity of the impact would not be known.


Details unknown yet.

But they have to keep in mind that ppl with low yearly incomes may have inheritances etc and use those to trade.

Stupid sebi

Welcome. To. India
Where the govt shoots itself in the foot moment something good starts happening.


SEBI Chairman Ajay Tyagi - “Individual investors may freely take exposure in the market (cash and derivatives) up to a computed limit based on their disclosed income under their Income Tax Return (ITR) over a period of time. For exposure beyond the computed limit, the intermediary would be required to undertake rigorous due diligence and take appropriate documentation from the investor,” the release said.




I think the least we can do is send our feedback to sebi at or thru feedback option in sebi website, expressing concerns of small full time retailer traders. What say? Whether it would have effect or not is a different thing, but at least we should start now and not be dependent on brokers expressing dissatisfaction alone.


@NestUser All of us together should do it … Bring in whatever rules you like but don’t stop me to trade options


Finance Minister is basically a Lawyer , he is dwelling in the world of rules & regulation , unlike Prime minster , he don’t have down to earth connection , he lost his MP election because of missing down to earth connection, , many of his advisers are "Arm chair advisers " ( after PM blasted about GST Rules & after GST reduced ) I think finance minister probably don’t know about stock trading and SEBI board members have taken advantage of it !!
Probably one day SEBI may make stock exchanges as stock brokers !!


Agreed. It’s just pathetic


is this going to affect day trading in futures too?


Why are we retail investors not protesting this decision by SEBI?? It looks as though they are controlled by corporate giants. NOTA seems even more friendly now since the government is also not raising concerns.


Here SEBI wants to protect small investors by preventing them to participate.instead they can introduce new product hedged position bundled in one trade this they are allowing for big timers.this can reduce margin for trade also risk.ex bull call spread bundled as one product.if at all implement new rule to prevent retailers discount brokerages will affected.


@nithin whats this? As I understand it, the higher the no. of lots traded, the higher will be the margin that would be levied to the entity in question
Does this mean its not based on income? Its good news if thats the case…bad news if both rules apply


@vivek This is a very good move by SEBI !!! The rich can afford to pay more margin.
This rule is different from the earlier announced rule.


Yes its a good move but only as long as its not accompanied by the income rule. Its bad news if both rules are enforced