F&O Trading: SEBI Issues New Guidelines Regarding Price Band Rules For Trading

F&O Trading Rules: SEBI has made some important changes in the price band rules of the shares traded in F&O to control sudden changes in the share price. The new rules are set to be implemented from June 3, 2024. Also, instead of 25 trades, 50 trades, and 5 unique clients will be increased. SEBI has also mandated the condition of having 10 unique clients. Through these rules, SEBI wants to control the sharp movement in big stocks.

F&O Trading Rule Change

The price band for stocks in F&O is set at 10% of the previous day’s closing price. So, if a stock closes at Rs 100, the next day’s price can range between Rs 90 and Rs 110. If the stock moves by at least 9.9% in any direction, the price range can increase by 5% for the whole day. When the price hits the lower or upper limit, trading pauses for 15 minutes. For the first two adjustments, this pause is extended to 30 minutes, and the price range increases by 3%. For the next adjustment, there is a 60-minute pause, after which the range increases by 2%. So initially, the price range increases by 5% after 15 minutes, then by 3% after 30 minutes, and finally by 2% after a 60-minute pause.