Sebi F&O Plan May Not Trip BSE

Steep slide

- Manish Joshi

SE Ltd stock is down about 20% since closing at ₹5,609 on 24 February, owing to a new consultation paper from markets regulator Sebi later that day.

The fear is clear: trading volumes may drop further if Sebi's recommendations are implemented. Still, the sharp fall in the stock suggests the Street may be overreacting. A deep dive into Sebi's paper indicates that the actual impact of the recommendations could indeed be small.

The consultation paper is divided into two parts. The Street seems concerned about the first part, or part A, which deals with index derivatives, a popular trading instrument.

Currently, calculating open interest is based on notional value (the total monetary value of contracts), and Sebi wants to shift to a delta-based future equivalent calculation.