NSE releases new guidelines for Futures and Options segment
This will help in strengthening risk management measures and orderly trading
Mumbai: The National Stock Exchange has released new guidelines for the Futures and Options (F&O) segment in order to strengthen its risk management measures and ensure orderly trading on the bourse.
The new framework would come into effect from May 5, which will initially be applicable to ‘mid and far month Futures and Options contracts only’.
Under this mechanism, the exchange has also suggested a methodology for deciding the reference price and the range for execution of orders in the Futures and Options (F&O) segment.
‘Orders shall be matched and trades shall take place only if the trade price is within the reference price and execution range,’ stated the exchange. There would be no change to the existing applicable operating ranges for valid order entry and all orders that are within the operating range shall be accepted as is being done currently. ‘Trade execution range shall not be applicable to India VIX futures and long term Option contracts on NIFTY,’ highlighted the circular.