BUSINESS

SEBI eases trading norms for equity derivatives contract

With an aim to ease trading requirements, markets regulator SEBI relaxed the combined futures and options position limit of stock brokers, FPIs and mutual funds in equity derivatives to 20 per cent of the applicable Market Wide Position Limit (MWPL).

The decision has been taken in consultation with SEBI’s Secondary Market Advisory Committee.

Currently, stocks having market-wise position limit of Rs. 500 crore or more, the combined Futures & Options position limit is 20 per cent of the MWPL or Rs. 300 crore, whichever is lower and within which stock futures position cannot exceed 10 per cent of applicable MWPL or Rs. 150 crore, whichever is lower.

In case of stocks having market-wise position limit less than Rs. 500 crore, the combined futures and options position limit is 20 per cent of the MWPL and futures position cannot exceed 20 per cent of the MWPL or Rs. 50 crore which ever is lower.

Market Wide Position Limit (MWPL) is one of the key parameters in analysis of stocks that trade in the derivative segment. — PTI