Sebi implements new margin rules for index option sellers to reduce trading volumes

The Securities and Exchange Board of India (Sebi) has introduced new measures to regulate index options trading, starting November 20. A key change is a 2% increase in the extreme loss margin for option sellers on expiry day, raising it from 12% to 14%. This adjustment is expected to significantly impact trading volumes, particularly on expiry days. Brokers have alerted clients about margin shortfalls, requiring them to increase their trading margins to maintain their positions. Additionally, Sebi has limited exchanges to one weekly index option expiry, reducing the number of available contracts. Other measures will be implemented in the coming months, aimed at curbing excessive trading in derivatives.