NSE notifies on Pre-Trade risk controls

Aug 06, 2022 | by TeamLease RegTech Legal Research Team

Loading audio.....

Secretarial ComplianceThe National Stock Exchange (NSE) on August 05, 2022 has issued circular regarding the Pre-Trade risk controls and Flexing of Operating range applicable to the options contracts.

The following Option OPR flexing at the contract level have been provided:

• Index Options:

o OPR flexing shall be applicable to ATM & all the OTM strikes determined based on prevailing underlying price

o OPR flexing shall be applicable to ITM strikes that are up to 1% away from the prevailing underlying price

o OPR flexing shall NOT be applicable to ITM strikes that are more than 1 % away from the prevailing underlying price

• Stock Options:

• OPR flexing shall be applicable to all the Stock option contracts irrespective of their moneyness

Exchange is introducing additional criteria to be fulfilled for flexing of contract level OPR of applicable Index & Stock option contracts as mentioned above,

• Contract level OPR shall be flexed only when a minimum of 5 trades occurs at prices above the trigger point of the prevailing OPR, involving minimum 5 unique UCCs on each side of such trades.

NSE shall review the mechanism and various aforesaid applicable parameters like minimum Trade count, minimum UCC count, % for consideration of ITM strikes, etc., from time to time based on the experience gained and inputs received from market participants / regulator.

NSE also requests its members to note that the changes shall be available for testing during mock session of August 06, 2022, and same shall be made effective from August 08, 2022.

[Circular Ref. No: 85/2022]


Bookmark

Related Updates



Alternate Text

Get updates on the go on RuleZbook Mobile App.