SEBI has issued a new circular on Futures and Options (F&O). According to the circular, SEBI's new rules related to F&O will come into effect from November 20. From February 1, upfront premium and intra-day position limits will be monitored from option buyers. Along with this, SEBI has set the value of index futures contract for derivatives to be at least Rs 15 lakh. Currently, it ranges from Rs 5 lakh to Rs 10 lakh. According to SEBI, the new rules for futures and options will be implemented in several phases.

SEBI tightens derivatives framework- Upfront option premium will be charged from index option buyers. The new F&O rules will be implemented in phases from November 20.

An additional margin of 2% will be charged for short option contracts on the day of option expiry. The contract size for index derivatives has been increased. The value of derivatives contract will not be less than Rs 15 lakh. There will be only one weekly expiry of an exchange every week. Intraday monitoring of position limits will be done from April 1, 2025. Upfront collection of option premium and increased margin will be applicable from February 2025. There will be only one expiry per exchange in a week. The value of index derivative contract will be Rs 15 lakh first, after which the value will be gradually increased to Rs 20 lakh. The benefit of calendar spread will not be available on the day of expiry. There is full upfront margin from option buyers. There will be intraday monitoring of positions. Why new rules came- Derivative market is a very risky market. SEBI is currently concerned that the share of retail investors is increasing in it. SEBI believes that investors are coming into it because they expect very high profits from here. But most of such investors do not understand the derivatives market. The purpose behind SEBI increasing the limits is that only such investors should enter the derivatives market who think seriously about the market.