From The Economic Times · Bloomberg · · 1m
Regulator U-Turn Boosts Indian Derivatives Market
SEBI reverses derivative settlement rule to stabilize Indian equity markets after chaotic CAS system.
In brief
SEBI reverses derivative settlement rule to stabilize Indian equity markets after chaotic CAS system. SEBI's return to volume-weighted average prices for derivative settlements may restore trader confidence and boost equity derivatives trading in India. Originally reported by The Economic Times.
Regulator U-Turn
SEBI reverses derivative settlement rule to stabilize Indian equity markets after chaotic CAS system.
Market Reaction
Participants report greater clarity and predictability around expiry settlement prices to restore trader confidence.
Trading Impact
Average daily turnover in equity derivatives fell to 18-month low on nse and one-third on bse before slight rebound in september.
Brokerage View
Jefferies analysts expect the move to boost trading in options and futures while reducing volatility on expiration days.
Trader Benefits
Proprietary trading desks may manage expiry risk more easily while arbitrageurs benefit from simpler hedging strategies.
Expert Insight
Eshaan Lazarus says reverting to vwap system reduces price swings and brings back traders affected by unfair settlement prices.
The headline
SEBI's return to volume-weighted average prices for derivative settlements may restore trader confidence and boost equity derivatives trading in India.
