SEBI F&O Reforms: Delta-Based OI, MWPL and Expiry Limits
Why in the news
SEBI finalised stricter equity derivatives norms after feedback on its February 2025 consultation paper.
Key facts
- Open Interest (OI) means unsettled futures or options contracts; the delta-based method reflects price sensitivity.
- The earlier ₹1,500 crore gross index options idea was dropped after pushback from HFTs and market makers.
- MWPL is the exchange-set maximum OI in a stock.
- Intraday: no position limits, but 4 random checks daily and exchange SOPs.
- Metropolitan Stock Exchange’s weekly Friday expiry plan is hit by the expiry curbs.
- Past data (FY22-FY24): 93% of individual traders lost money; a fresh survey was due by mid-June.
| Item | Rule |
|---|---|
| MWPL | Lower of 15% free-float market cap or 65x average daily delivery value |
| FPIs and mutual funds | 30% of MWPL per stock |
| Individuals | 10% of MWPL per stock |
Significance
- Ties derivatives exposure to cash-market liquidity; reduces manipulation and F&O ban periods.
Exam angle
- Terms: OI, MWPL, delta; numbers 15%, 65x, 30%, 10%.