SEBI proposes framework for management of option strike prices during market volatility

Capital market regulator Sebi on Monday proposed a comprehensive framework for the introduction and ongoing management of strike prices in options contracts to ensure the availability of contracts during periods of sharp intraday market volatility. In a consultation paper, Sebi said significant volatility in underlying or futures prices can lead to market movements beyond the farthest available strike price, causing inconvenience to market participants due to the non-availability of options contracts around prevailing market levels. To address this issue, the regulator proposed that stock exchanges put in place a framework governing the introduction and management of options contracts.

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