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Capital markets regulator Sebi is expected to take measures regarding the Futures and Options (F&O) segment very soon, in a bid to enhance investor protection , its senior official said on Tuesday. In addition, Sebi has urged the government to introduce tax breaks for subscribers of municipal bonds , which are crucial for funding infrastructure development . The regulator will make a case for a tax break for municipal bonds during a meeting with the finance commission , the regulator's whole time member Ashwani Bhatia said here.
Since 1997, municipalities have raised Rs 2,700 crore through bonds for infrastructure projects. Talking about F&O, Bhatia said," Sebi is very soon going to do something about F&O. Study has come (recently)".
The regulator, in its consultation paper recently, proposed seven measures to tighten the rules for index derivatives-- revise the minimum contract size and require upfront collection of option premiums intra-day monitoring of position limits, rationalisation of strike prices, removal of calendar spread benefit on expiry day and increase in near contract expiry margin. Stock Trading Market 101: An Insight into Trendlines and Momentum By - Rohit Srivastava, Founder- Indiacharts.com View Program Stock Trading Markets 102: Mastering Sentiment Indicators for Swing and Positional Trading By - Rohit Srivastava, Founder- Indiacharts.
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In phase 1, the minimum contract value at the time of introduction should be between Rs 15 lakh and Rs 20 lakh. After six months, phase 2 will raise the minimum value to between Rs 20 lakh and Rs 30 lakh. The current minimum contract size of Rs 5 lakh to Rs 10 lakh was last set in 2015.
A recent study by Sebi revealed that 93 per cent of over 1 crore individual F&O traders incurred average losses of around Rs 2 lakh per trader (inclusive of transaction costs) during the three years from FY22 to FY24. The aggregate losses of individual traders exceeded Rs 1.8 lakh crore over the three-year period between FY22 and FY24.
The report highlights an increase in the loss-making individual investors in F&O compared to 89 per cent in FY22. (You can now subscribe to our ETMarkets WhatsApp channel ).
