1) Rationalisation of options strikes
Sebi has proposed to rationalise existing strike price introduction methodology. Strike interval should be uniform near the prevailing index price (4% around prevailing price) and the interval to increase as the strikes move away from prevailing price (around 4% to 8%),
2) Upfront collection of options premium
In order to avoid any undue intraday leverage to end clients and to discourage any market wide practice of allowing position beyond the collateral at the end client level, it is desirable to mandate collection of options premium upfront from the options buyer
3) Removal of calendar spread benefit on expiry day
Given the skew in volumes witnessed on the expiry day vis-à-vis other non-expiry days and the inherent basis and liquidity risk present therewith, the margin benefit for calendar spread position would not be provided for positions involving any of the contract expiring on the same day.
4) Intraday monitoring of position limits
Given the evolving market structure, the position limits for index derivative contracts shall also be monitored by the clearing corporations/stock exchanges on intraday basis, with an appropriate short-term fix, and a glide path for full implementation, given the need for corresponding technology changes
5) Minimum contract size
The minimum value of derivatives contract should be increased from Rs 5-10 lakh to Rs 15-20 lakh in the first phase and Rs 20-30 lakh in the second phase.
6) Rationalising of Weekly options
Given there is an expiry of weekly contracts on all five trading days of the week, the regulator has proposed that weekly options contracts should be provided on a single benchmark index of an exchange.
7) Increase in margin near contract expiry
To address the issue of high implicit leverage in options contracts near expiry, creating a high risk on notional basis for entities dealing in options, SEBI said Extreme Loss Margin (ELM) should be increased by 3-5%.
Link :- https://www.sebi.gov.in/sebi_data/attachdocs/jul-2024/1722407296072.pdf
