SEBI expert group to consider proposals to regulate risky futures-options trading

Kolkata. The expert group formed by the Securities and Exchange Board of India (SEBI) will consider seven proposals to protect small investors from risky futures-options (derivatives) trading in the stock market. Giving this information, sources said that the expert group will also discuss the regulatory issues related to it. He said that the group members will recommend short-term strategies to strengthen investor protection and improve risk in this market segment.

A source close to the matter told PTI, “The expert group will discuss in detail the pros and cons of seven proposals to protect small investors involved in futures and options (F&O) trading. We know that nine out of 10 small investors lose money in F&O. The final decision on the recommendations of this group will be taken by the Secondary Market Advisory Committee.

Options are financial contracts that give the holder the right to buy or sell an asset at a fixed price within the contract period. According to sources, these proposals include rationalising weekly options, rationalising strike prices of assets and removing calendar spread benefits on the expiry day. The other four proposals include upfront collection of option premium from buyers of options, monitoring of trading limits during day trading, increase in lot size and increase in margin requirements near contract expiry.

Disclaimer: CricketInFocus has not edited this news. This news has been published from PTI-language feed.

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