Mumbai
The Securities and Exchange Board of India (SEBI) has reintroduced intraday position limits for index options trading, effective October 1, drawing broad support from market participants. The regulator has capped intraday positions per entity at ₹5,000 crore and gross intraday exposure at ₹10,000 crore, mirroring existing end-of-day limits.
Market experts said the move enhances discipline, ensures tighter surveillance, and reduces risks of excessive speculation, particularly on volatile expiry days. The framework aims to balance liquidity with risk management, addressing concerns after instances of oversized positions created instability, most notably in the Jane Street case earlier this year.
To enforce compliance, stock exchanges must monitor positions using at least four random intraday snapshots, including one close to market closing. Entities breaching limits will face scrutiny, with trading patterns examined and explanations sought. Additional penalties and surveillance deposits will apply to violations on expiry days, starting December 6.
Industry voices welcomed the step. Ajay Garg of SMC Global Securities said the limits provide traders flexibility while strengthening oversight. Rupak De of LKP Securities noted the curbs could improve liquidity and reduce expiry-day shocks, indirectly benefiting retail traders. Arjun Prajapati of Asit C Mehta Investments added the measures would foster mature, disciplined participation.
By confining the framework to index options, SEBI aims to preserve market stability and prevent destabilizing intraday bets, ensuring India’s derivatives market continues its growth under robust regulation.
