To curb speculation and maintain market stability, the Securities and Exchange Board of India (SEBI) has announced new measures to regulate derivatives trading, effective from October 1. These measures aim to reduce excessive speculation and align risk with underlying cash market activity.

Market-Wide Position Limit (MWPL):

The maximum number of bets allowed will be linked to cash volume and free float of the scrip. MWPL will be set at the lower of 15 per cent of free float or 65 times cash volume across exchanges.

According to the market regulator, MWPL will be updated quarterly based on rolling cash volume data to reduce manipulation risks.

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SEBI expects that tying the MWPL to cash market delivery volume may also reduce the risk of manipulation.

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