%20(500%20%C3%97%20280%20px)%20(500%20x%20300%20px)%20(2).png "New framework to curb excessive speculation in stock market has been announced by SEBI")
- Here are the key measures introduced:
- Increased Minimum Investment: The minimum amount required to invest in index futures and options (F&O) contracts will be raised from the current range of ₹5-10 lakh to ₹15 lakh. This change aims to make these contracts less accessible to smaller investors.
- Upfront Collection of Option Premiums: Starting February 1, 2025, brokers will need to collect option premiums upfront from buyers. This measure is intended to discourage excessive intraday leverage.
- Removal of Calendar Spread Benefits: The benefit of offsetting positions across different expiries (calendar spread) will no longer be available on the expiry day for contracts expiring on that day, effective February 1, 2025.
- Intraday Monitoring of Position Limits: From April 1, 2025, stock exchanges will begin intraday monitoring of position limits for equity index derivatives to prevent positions from exceeding permissible limits.
- Reduction of Weekly Expiries: Starting November 20, 2024, the number of weekly expiries for index derivative contracts will be reduced to one per benchmark index per exchange.
- Higher Margin Requirements: An additional extreme loss margin (ELM) of 2% will be implemented for all open short options on the day of expiry to protect investors from extreme market fluctuations.
- These measures are designed to enhance market stability and protect retail investors from the risks associated with speculative trading.
Question:
1 What is the new minimum investment amount required to invest in index futures and options (F&O) contracts as per SEBI's October 1, 2024, announcement?
- A) ₹5 lakh
- B) ₹10 lakh
- C) ₹15 lakh
- D) ₹20 lakh
