By Admin 
Sebi new rule: Market Regulator SEBI has announced to implement the new position limit on intraday derivative trading (F&O). The new rule will come into effect from 1 October. Under this new rule, SEBI has increased the limit of intraday net position for index options from Rs 1500 crore to Rs 5,000 crore per unit. Its purpose is to balance the depth and stability of the market.
How much will be the limit of net intraday position now?
In the circular issued on 1 September, SEBI said that the Derivatives Market’s highest business segment will implement clear boundaries on intraday investment in index options. Its calculation will be done on the basis of new Futures-Equivalent (FuteQ) framework after adjusting long and short trades.
Under this framework, the net intrade position of a trader measured on the basis of futures-equivalent will be Rs 5000 crore. Due to this new rule, no investor will be able to take more positions than the limit fixed by SEBI. However, the gross position limit has been retained at 10000 crores, which will be applicable separately on long and short side. SEBI has also tightened the monitoring norms of exchanges for such large betting bets.
What will be the benefit of this?
SEBI says that some investors make big positions by taking excess leverages. This increases the risk in the market as well as volatility. Now with the new rule, traders will have to make positions according to the capital and margin available in real form. This will increase transparency and stability in the market. Also, retail investors will be saved from damage. With the installation of Pambadi on the limit, investors will now have to trades intraday inside the limit. That is, now traders will not be able to do big trade by taking more leverages, which will reduce the chances of loss for small retail investors to a great extent.
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