The Securities and Exchange Board of India (SEBI) is planning to introduce new rules for Futures and Options (F&O) trading to enhance investor protection. These measures are expected to be announced soon. The proposed rules include:
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Revising the minimum contract size to ensure better control over trading volumes.
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Collecting option premiums upfront to prevent misuse.
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Intra-day monitoring of position limits to avoid excessive speculation.
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Rationalizing strike prices to make trading more transparent.
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Removing calendar spread benefits on the expiry day to reduce manipulation.
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Increasing near contract expiry margins to manage risk better.
These changes aim to curb retail participation in index futures and options, limiting potential losses for individual traders. SEBI’s decision comes after a study revealed significant losses incurred by traders in the F&O market over the past three fiscal years.
