Sebi Announces New F&O Rules

[SG_13]

@pandeysatyendra

can anyone please explain, how intraday position limits will be monitored for equity index derivatives? and what is upfront collection of options premiums as my broker always take the premium upfront when i buy options?

@Meher_Smaran

5. Intraday monitoring of position limits

Right now, the maximum exposure you can take (position limits) in a contract is only checked at the end of the day. For individual traders, this is 5% of the total open interest, and for brokers, it’s 15%. Traders can exceed these limits during the day as long as they fix their positions before the market closes.

Starting in April 2025, SEBI will introduce intraday monitoring of position limits. Exchanges will take at least four snapshots during the trading day to make sure traders aren’t exceeding their limits at any point.

This will help ensure no one is taking on more risk than they should, even temporarily.

6. Paying the full option premium upfront

In 2020, SEBI introduced upfront margin requirements across the board. For equities, traders must pay at least 20%, and for futures and options selling, traders need to bring in the SPAN and exposure margins upfront. However, the upfront payment of option premiums was still collected at the end of the day.

Now, SEBI wants traders to pay the full premium upfront when buying options. This means no more using borrowed money or relying on brokers to cover it, ensuring there’s no extra leverage for an already leveraged product.

Here's what SEBI is doing to restrict F&O trading | The Daily Brief

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