SEBI Plans Uniform Rules For Options Strike Prices Amid Surge In Trading

Market regulator, the Securities and Exchange Board of India (SEBI), is evaluating a proposal to introduce a uniform framework for managing options strike prices. The focus is on enabling exchanges to add new strikes during market hours.

The move comes as derivatives trading volumes rise sharply. It is driven by higher retail participation and increased activity in options. SEBI has flagged gaps in the current system, especially during sharp intraday market swings when relevant strike prices are often unavailable.

People aware of the discussions said the proposal allows exchanges to introduce new strike prices intraday, particularly in the direction of steep moves in the underlying asset. This is aimed at keeping options contracts aligned with prevailing market levels.

Gaps In Current System

SEBI has flagged uneven practices in how strike prices are handled. The current rules largely apply to long-dated index options. Other segments like stocks, currencies, and commodities follow their own exchange-level methods. This has created differences across markets where:

• A few exchanges add new strike prices during trading hours

• Others still lack that facility

• Many old strike prices stay listed even when there is barely any trading

People aware of the matter said intraday addition of strikes is not available everywhere. That leaves traders with fewer relevant choices when prices move sharply.

SEBI noted that in fast markets, useful strike prices are often missing. At the same time, strikes far away from the current price remain on the screen with little activity.

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Focus On Efficiency, No System Disruption

The proposal tries to fix this without disturbing live trading. People familiar with the discussions said brokers and market participants will not need to change their systems during the day. That is a key part of the plan. The framework also asks exchanges to take a more structured approach and:

• Review strike price rules at regular intervals

• Take feedback from brokers and traders

• Make the rules public

The idea is to bring some uniformity while improving how trades get executed and priced. These talks come as derivatives trading continues to expand in India. Options volumes have risen sharply, with more retail investors entering the segment.

Source:

Moneycontrol