Intraday Futures and Options Trading Gets Tougher Starting Tomorrow

From Wednesday, October 1, several changes in equity derivatives trading will come into force, introducing stricter rules for intraday futures and options trading. These changes aim to improve market stability, manage risks, and curb excessive speculation in the derivatives segment.

Market-Wide Position Limit Redefined

One of the key changes involves the market-wide position limit (MWPL). This limit sets the maximum number of positions a trader or entity can hold in a particular stock. SEBI has now linked the MWPL to the cash volume and free float of a stock. The new formula fixes it at 15 percent of free float or 65 times the cash volume across exchanges.

Previously, MWPL was calculated based on 20 percent of non-promoter shares in a scrip, recalculated every three months. By tying the MWPL to cash market delivery volume, SEBI hopes to reduce price manipulation and align derivative risks with underlying cash market liquidity.

Intraday Monitoring and Limits

To further manage risks, net intraday positions in index derivatives will now be capped at ₹5,000 crore per entity, with gross intraday positions limited to ₹10,000 crore. Exchanges are required to monitor positions through at least four random snapshots during trading sessions. 

On expiry days, breaches will attract penalties or require surveillance deposits, though additional exposures are permitted if fully backed by cash or securities. Penalties for expiry-day breaches will come into effect from December 6, 2025.

Trades During Ban Period

Another significant change allows trades in futures and options even when a stock enters the ban period, provided it reduces the risk of a portfolio. Once a scrip enters the ban period, traders can now create fresh positions only if it lowers open interest in that stock by the end of the day. Earlier, no new positions were allowed during the ban period.

Single-Stock Derivative Limits

SEBI has also introduced new position limits for single-stock derivatives. Individual traders can hold up to 10 percent of MWPL, proprietary brokers up to 20 percent, and foreign portfolio investors and brokers together up to 30 percent.

Phased Rollout of Additional Measures

These updates are part of a broader set of reforms announced by SEBI in May 2025. From November 3, new eligibility norms will apply for derivatives on non-benchmark indices. From December 6, pre-open and post-closing sessions will be introduced for the futures and options segment to improve market transparency.

Read more: SEBI Plans To Extend Equity Derivatives Tenure And Boost IPO Transparency

Curbing Excessive Speculation

Over the past few years, SEBI has taken multiple steps to cool speculative activity. These include reducing the number of weekly expiries, increasing lot sizes, removing calendar spread benefits on expiry days, mandating upfront premium collection from option buyers, and tightening intraday monitoring. 

The new measures build on this approach to ensure a safer and more regulated derivatives market. With these changes coming into effect tomorrow, traders and brokers will need to adapt their strategies and monitor positions carefully to comply with the new rules.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.