Sebi plans tweaks to address derivative trading risks: Report
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Sebi is considering a series of tweaks to its derivative trading rules, according to two sources, as it seeks to address risks arising from explosive growth in options trading. The new rules could include higher margins for options contracts and more detailed disclosures, and are being considered after a series of meetings with exchanges, brokers, and fund houses over the past four months, the sources, with direct knowledge of the matter, said. Both sources declined to be identified as they are not authorised to speak to the media. Trading in index and stock options has soared in India in the last few years, fueled mainly by retail investors, sparking warnings from market participants and government officials. The notional value of index options traded more than doubled in 2023-24 to $907.09 trillion from the year before. An unchecked explosion in retail trading of futures and options can create future challenges not just for the market...