The proposed hike in index derivatives contract size by the Securities and Exchange Board of India (Sebi) to the derivatives framework is seen as boosting the appeal of the already popular — and highly risky-options segment.
The regulator has proposed that the minimum value of the derivatives contract at the time of introduction should be between ₹15 lakh and ₹20 lakh. It should be further increased to between ₹20 lakh and ₹30 lakh after six months, Sebi has said in a consultation paper. Currently, the minimum value of a derivatives contract is around ₹5 lakh. The higher contract size is aimed at increasing the entry barrier for small investors. The entry barrier for the futures segment is already high compared to options where trades can take positions for even less than ₹500. As a result, the options segment is gaining more popularity.
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