BSE modifies October circular on extra margins for derivatives

MUMBAI: The BSE on Monday made a partial modification to the October circular on additional margins in the equity derivatives segment.

The exchange said that for securities with intraday (high-low) price movement of more than 10% in the underlying market for 10 or more days in the last six months, the minimum total margins will be equal to the maximum intraday price movement of the security observed in the underlying market in the last six months.

The circular will come into effect from Wednesday. This was announced after discussions in a joint meeting between SEBI, exchanges and clearing corporations, BSE said.


The modification has been made to the circular dated October 12 wherein BSE had said that stocks with intraday price movement of more than 10% in the underlying market for three or more days in the last one month will be identified.

“It means that any time there is high volatile movement in a stock in the last six months then minimum total margin which is equal to the maximum intraday price movement in the stock in the last six months will be levied,” said Amit Gupta, Head of Derivatives at ICICIdirect. “This has been done to reduce the number of people taking positions in the stocks which have seen wild movements,” said Gupta.