So far Option writers are not worried ,about increase of margin money , but it seems that SEBI is going to hit "option writers badly " What is cooking in the mind of SEBI and its board members ? is it a mind set problem or something else , share your opinions
Actually There was a news that OI was building up at NIFTY June 5000 CE and it is a very unusual thing and SEBI is aware that deep-in-the-money strikes, like in the Nifty 50 contracts, could be used for negotiated trades.
So i think it’s only for very Deep ITM strikes
Now a days semi acts like Trumph …
well , it looks like SEBI & members wants to run day to day activities of a stock exchange !!
1)I think liquidity will increase in strikes around ATM if this is done.
2) I am not sure about this point but I think theta decay will happen less. I hope experts clear this point.
3) Overall this is a pro-buyers rule if it happens.
4) Illicit transactions thru stock market will reduce.
5) I also hope maximum of 3 contracts are open at any given time.(Current+Near+Far)
Your points are true but in my opinion volatility will increase to a high level , and also increased margin will decease call writers participation , ultimately mutual fund managers will be very happy!!
, as always SEBI rules are backfiring ones,
I really don’t think so
Liquidity increase = Volatility decrease
I have a feeling like margins might be decreased in the coming months, at least for option players. ANMI has protested already.
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Yes sometimes I feel like there is some under the table dealings between SEBI and MF industry.
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I am not an options guy so I dont know. But Nifty premiums decay slower than stock option premiums, this is what I observed. I might be wrong here, I dont know.
I too ,was thinking like that , by chance i saw a tweet from this person , who is claiming to be a big & successful option writer , SEBI is probably helping not only MF s but also SGX Nifty , at the expense of Indian retail traders./ Indian stock market .