SEBI NEW F&O Rule " Pre Market Report Nifty & Bank Nifty 03 October 2024, Range, Prediction

Summary

The video discusses recent changes introduced by SEBI on October 1, 2024, aimed at reducing speculation in F&O trading. Key updates include contract size increases, limits on weekly expiries, and margin rule adjustments. Some changes take effect in November 2024, while others will roll out in 2025. The presenter explains how these changes may impact traders, particularly impulsive ones, and speculates on potential shifts in trading patterns. The video also covers pre-market analysis for Nifty and Bank Nifty, market trends, and the influence of international events on the Indian market.

Takeaways

• 📢 SEBI introduced six new changes for F&O trading to reduce speculation, with some changes effective from November 2024, and others in 2025.
• 📅 Three rules will be implemented on November 20, 2024, two more in February 2025, and the final rule in April 2025.
• 💼 SEBI's major changes include stopping calendar spread margin benefits and brokers monitoring trade members four times a day starting April 2025.
• 💰 SEBI is increasing the contract size for options, with Nifty's lot size expected to rise from 25 to 75, effective November 20, 2024.
• 📉 Only one benchmark index weekly expiry per exchange will be allowed, with NSE likely to choose Bank Nifty, and BSE potentially opting for Sensex.
• 🔍 SEBI also plans to increase expiry day margin by 20%, which could impact traders, especially impulsive ones.
• 📝 Traders will still be able to trade existing November and December options, but no new ones can be opened after November 20, 2024.
• 📊 U.S. market conditions are affected by the Iran-Israel conflict, with major indices like Dow Jones, S&P 500, and NASDAQ all showing significant drops.
• 🌍 Global events, such as rising oil prices and U.S. private payroll data, are causing market uncertainty and influencing Indian market trends.
• 🚗 Auto sector stocks like Hero MotoCorp and Maruti Suzuki are gaining attention due to positive sales figures, while FMCG might be impacted by heavy rains.

Q & A

What are the key objectives behind SEBI's new changes in F&O trading rules?

SEBI introduced new changes to reduce speculation in F&O trading. These changes include increasing contract sizes, limiting weekly expiries, and introducing stricter monitoring of traders exceeding their limits.

When will SEBI's six changes in F&O trading rules be implemented?

Three changes will be effective from November 20, 2024, two from February 2025, and one from April 2025.

How will the new SEBI rules regarding upfront premium collection affect traders?

The new rules will likely not affect the majority of traders but will impact impulsive traders. Upfront premium collection from buyers will be required, which could affect those who trade frequently without proper margin control.

What are the key changes in the F&O contract sizes effective from November 20, 2024?

The option lot sizes will be increased from the current range of ₹5-10 lakh to ₹15-20 lakh. Bank Nifty’s lot size may increase from 25 to 30, and Nifty's lot size may increase from 25 to 75.

How will SEBI's changes to calendar spread margin benefits impact traders?

SEBI will remove the calendar spread margin benefit, which is currently offered because of the low risk involved in calendar spreads. This will affect traders who rely on this benefit to reduce their margin requirements.

What will happen with weekly expiries under the new SEBI rules?

SEBI will allow only one benchmark index weekly expiry per exchange. The presenter believes that NSE may opt for Bank Nifty as the weekly expiry and BSE may opt for Sensex to maintain competitive volume.

What are the present concerns with Nifty and Bank Nifty options under SEBI’s new rules?

The presenter believes that Nifty, which consists of 50 stocks, and Bank Nifty, which consists of 12 stocks, may lead to speculation due to their limited stock base. This could increase market volatility.

How will the new SEBI rules affect traders who have open options positions before November 20, 2024?

Traders will be able to continue trading existing options positions or those opened before November 20, 2024, but no new options can be opened under the old contract sizes after this date.

What is the expected impact of the Middle East conflict on the stock market?

The escalation between Iran and Israel has caused significant negative sentiment in the U.S. markets, leading to declines in major indices and an increase in oil prices. This is expected to impact Indian markets as well.

What technical levels are critical for Nifty and Bank Nifty according to the video?

For Nifty, the critical support is at 25,650, and resistance is at 26,000. For Bank Nifty, the support is at 52,600, and resistance is at 53,250. The presenter expects weak sentiment to persist if these levels are not breached.