BSE is going to require more exposure margin for derivatives

 BSE is going to require more exposure margin for derivatives

The extra margin charge is going to be imposed on derivatives where the top 10 customers of the brokerage own more over 20% of MWPL as of January 1.

According to the exchange operator, securities will be identified using three-month rolling data under this system, and they will be evaluated every month.

The Indian Clearing Corporation, a division of Indian Stock Exchange Operator BSE, said on Tuesday that it would apply an extra exposure margin of 15% to stocks that fall within the Market Wide Position Limit (MWPL).

The action was taken in response to growing retail involvement in the futures market, which helped Indian benchmarks reach fresh all-time highs this month.

The extra margin charge is going to be imposed on derivatives where the top 10 customers of the brokerage own more over 20% of MWPL as of January 1.

The maximum quantity of open futures and options contracts for a stock that the exchange will permit is known as MWPL.

In order to shield the broker from liability resulting from market volatility, exposure, or extra margin, is taken over and above the current margin.

In the December series, Nuwama Alternative and Quantitative Research issued a warning against aggressive long holdings in the category of high net worth investors.

The BSE said in a statement that extra exposure margin or additional monitoring margin, whichever is larger, would also be charged for securities where additional monitoring margin is applicable.

According to the exchange operator, securities will be identified using three-month rolling data under this system, and they will be evaluated every month.