The Securities and Exchange Board of India (Sebi) is reportedly reviewing intraday position limits in index options, aiming to rein in excessive trading, particularly on expiry days, according to sources cited by Moneycontrol.
Currently, there are no explicit intraday limits, though exchanges monitor positions at the same thresholds as end-of-day (EoD) limits—Rs 1,500 crore on a net delta (futures-equivalent) basis and Rs 10,000 crore on a gross basis. However, analysis of recent expiry-day trades in Nifty and Sensex contracts revealed that intraday positions often exceed these limits.
For instance, on the Nifty expiry of August 7, top net long and short positions reached Rs 4,245 crore and Rs 5,409 crore, respectively, while gross positions surpassed Rs 10,192 crore (long) and Rs 11,777 crore (short). On the Sensex expiry of August 5, top net positions were Rs 2,249 crore (long) and Rs 3,055 crore (short), with gross positions hitting Rs 11,831 crore (long) and Rs 9,647 crore (short).
In response, Sebi is considering raising the intraday monitoring threshold to Rs 5,000 crore while retaining the Rs 10,000-crore gross ceiling. The move follows the regulator’s February 2025 consultation paper, which had proposed higher intraday thresholds but was withdrawn in favor of tighter monitoring.
Sebi noted that intraday monitoring is crucial since positions expiring on expiry day do not appear in EoD data. While additional positions backed by cash, securities, or equivalents would be allowed, the regulator plans to distinguish rules for expiry and non-expiry days: violations on non-expiry days would prompt exchange-level scrutiny, whereas expiry-day breaches would attract penalties. Exchanges will also monitor intraday positions at four random intervals daily, including near market close.
The proposal, discussed with stock exchanges, brokers, and market participants, aims to balance market integrity with the flexibility needed for liquidity providers and market makers who frequently square off positions intraday. Sebi had earlier prescribed a glide path for position limits until December 5, 2025, with the new intraday monitoring framework expected to be operational from December 6.
The regulator hopes that these measures will curb systemic risk, safeguard market integrity, and reduce volatility, particularly during expiry days.
