SEBI wants options contracts to stay available even when markets lurch — but one detail remains unsettled.
SEBI has proposed a new framework for managing options strike prices, aiming to keep tradable contracts available near market levels even when prices swing sharply within a single session. The regulator floated a consultation paper on Monday and has invited public comments until June 15, 2026. (Source: Business Standard)
Why SEBI Wants to Standardise Options Strike Prices
India’s options segment is the highest volume-generating part of the equities market, yet exchanges currently follow different approaches to listing strikes, and only long-dated index options have a single rationalisation rule. SEBI says sharp intraday moves can push the underlying beyond the farthest available strike, leaving traders unable to find contracts near the prevailing price.
Under the proposal, exchanges would maintain a minimum number of in-the-money and out-of-the-money contracts, review strikes daily, and introduce new ones intraday in the direction of the move — without forcing system changes on brokers during live trading. (Source: Telangana Today)
What It Means for F&O Traders
For retail participants who tend to cluster around at-the-money and cheaper out-of-the-money strikes, the change is meant to reduce moments when no suitable contract exists to open or adjust a position during a fast move. SEBI frames the proposal as easing trading and improving continuity rather than altering risk — it is a procedural reform, not a directional call on any index or stock.
The framework would apply across equity, currency and commodity options, though SEBI said the exact rules and intervals may differ by segment depending on liquidity. The regulator also plans to discontinue an older clause on rationalising strikes for long-dated index options once the new system goes live.
The Detail Analysts Are Watching
The proposal also asks exchanges to remove strikes that sit far from current prices. A senior derivatives analyst cited by Informist Media flagged that this could create complications where those contracts still carry open positions, and noted SEBI has not clarified whether removal will account for them. This is a single-source observation, but it touches money already committed to live trades — worth tracking before the framework is finalised. (Source: Informist Media)
What to Check Before Forming a View
- Whether your exchange or broker has published its strike-management framework, once SEBI finalises the rules.
- Open interest sitting at strikes far from the spot price — these are the contracts flagged for possible removal.
- SEBI’s final circular after June 15 for exactly how it treats existing open positions during strike removal.
This article is journalism and educational commentary, not investment advice. The author is not a SEBI-registered Research Analyst. Figures should be independently verified against official filings before any financial decision.
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