In a move to rein in risky bets, the Securities and Exchange Board of India (Sebi) has introduced an entity-level framework to monitor intraday positions in equity index options.
Effective 1 October 2025, net intraday positions will be capped at ₹5,000 crore and gross positions at ₹10,000 crore per side.
Per side means the ₹10,000 crore gross cap applies separately to the long side and separately to the short side, while the ₹5,000 crore cap governs the overall net long or net short after offsets. This means up to ₹10,000 crore on the buy side and separately up to ₹10,000 crore on the sell side during the trading day.
Net position refers to the overall directional bet (long or short) after cancelling out opposite positions, while gross position represents the total exposure on both buying and selling sides combined.
Sebi’s new limits aim to curb outsized expiry-day bets without disrupting market-making activity.
The circular released late Monday, said exchanges will enforce compliance through at least four random snapshots during the trading day, including one between 2.45 pm and 3.:30 pm. Breaches on expiry days will attract penalties or additional surveillance deposits from 6 December 2025.
The decision to set a ₹5,000 crore intraday net cap follows market feedback and SMAC deliberations, after earlier proposals and a May 29 circular that set end-of-day limits at ₹1,500 crore net and ₹10,000 crore gross with a glide path to December 6, 2025. There was no separate intraday cap.
The decision to impose the ₹5,000 crore intraday limit has been cheered by market participants who had feared the markets regulator might impose the much stricter ₹1,500 crore limit during trading hours.
Angel One, the country’s third-largest broker by client base, after unlisted broking firms, Zerodha and Groww, traded nearly 2% higher at ₹2,309 on the National Stock Exchange (NSE) on Tuesday.
Sebi clarified that limits can be higher for those with underlying exposure above ₹5,000 crore. The gross limit continues to remain ₹10,000 crore.
Exchanges will also prepare a joint SOP for intraday monitoring within 15 days and issue it before the circular takes effect.
Why it matters
The Sebi clarification comes as the NSE shifted its weekly index options expiry from Thursday to Tuesday, starting today. The BSE will also shift its weekly index options to Thursday from Tuesday starting this week.
The timing is significant as these expiry day changes create new market dynamics that could affect trading patterns and volatility distribution throughout the week.
Sebi’s circular seeks to address concerns about risky trading behaviour in the derivatives market, particularly on days when options contracts expire.
Index options—used by foreign portfolio investors, domestic institutions, proprietary traders, HNIs and retail participants—allow bets on indices like Nifty and Bank Nifty without owning the underlying stocks.
The regulator’s move follows instances of massive expiry-day positions that created abrupt price swings, posing risks to market stability and retail investors.
The new framework now sets clear boundaries for how much exposure individual traders or entities can take during trading hours.
