"This will restrict speculative tendencies of the market and will create a regulatory activity on traders and speculators to open big positions," Jagannadham Thunuguntla, equity head of Nexgen Capital said. At present, he said, the limit for the margin requirement in derivative products is 5 per cent, which is calculated on the basis of share price movement, open interest and volatility involved in options of a particular stock.

1. Sebi hikes margin requirement for derivatives
PTI
Wednesday, October 15, 2008 19:55 IST
MUMBAI: Market regulator Sebi on Wednesday increased the margin requirement for exchange traded
equity derivatives, a step to protect the interest of investors, amid huge volatility being witnessed on
bourses in the past few days.
quot;With a view to ensure market safety and safeguard the interest of investors, it has now been decided
that the exposure margin shall be higher of 10 per cent or 1.5 times the standard deviation,quot; Sebi said
in a circular here.
Analysts said the regulator's move to ensure safety of investors is in the right direction as the markets
have been showing huge volatility in the recent past.
quot;This will restrict speculative tendencies of the market and will create a regulatory activity on traders
and speculators to open big positions,quot; Jagannadham Thunuguntla, equity head of Nexgen Capital
said.
At present, he said, the limit for the margin requirement in derivative products is 5 per cent, which is
calculated on the basis of share price movement, open interest and volatility involved in options of a
particular stock.
Sebi has increased this limit to 10 per cent to provide more safety to the investors as they loose
money due to the large volatility in markets, he added.
Markets, in the past few days, have been been witnessing a downward trend. The Bombay Stock
Exchange benchmark index Sensex on Wednesday closed down 674 points at 10,809 points.