Mumbai. New rules for futures and options trading have come into effect in the stock market from November 20. Since the market is closed today in Mumbai due to election voting, these rules will come into effect from tomorrow (November 21). Market regulator SEBI has brought this rule to control the increasing risk in F&O trading so that the interests of retail investors can be protected. 6 important changes have been made to strengthen the equity F&O segment. Let us tell you how much futures and options trading will change from tomorrow.

Weekly expiry will be reduced.

SEBI has reduced the number of weekly expiries for index derivative contracts to one index, one expiry. So now only Nifty and Sensex will have weekly expiries. Bank Nifty expiry has been discontinued.

Increase in contract size

The minimum trading amount for option sellers in the derivatives market will increase from the current Rs 5-10 lakh to Rs 15 lakh. This increase is to ensure that investors take appropriate risks while participating in the derivatives market.

Extreme Loss Margin

To enhance tail-risk coverage, SEBI will impose an additional extreme loss margin (ELM) of 2 percent for all open short options on the expiry day. The measure is aimed at protecting investors from extreme market volatility.

Upfront collection of premium

However, this rule will be effective from February 1, 2025. It will require brokers to collect the option premium in advance. The aim of this change is to discourage excessive intraday takers among investors so that they have enough collateral to cover their positions.

The calendar spread facility will end.

The long-standing practice of calendar spreads - offsetting positions at different expiries - will be eliminated for contracts expiring on the same day. The change is aimed at reducing the likelihood of large-scale speculative trading on the expiry day.

From April 1 next year, stock exchanges will introduce intraday monitoring of position limits for equity index derivatives. This means that position limits will be checked multiple times throughout the trading day, reducing the risk for traders.