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SEBI Group Recommendations for Derivatives


A thought provoking set of recommendations for derivatives has been released by a SEBI working group.

  • Mini contracts on equity futures, apart from the Mini Nifty. That happened almost automatically as some stocks fell 90%, but now they may be formalised.
  • LEAPs or long term options on stocks and indices. Currently on Nifty only, the recommendation is to do this for stocks and other indices also.
  • Futures and Options on the VIX. Useful to hedge option contracts.
  • Options on Currency futures. These are unbelievably useful.
  • Bond Indices and related F&O. Oh goodness, finally, one can short bonds too. If this is approved.
  • Futures on other currencies: Yen, Euro, Pound.
  • Strategy based ETFs – like covered calls and puts.
  • Credit derivatives, exchange traded or settled.

The suggestions are good, but they seem to happen every year or so, with not much action to support them. Hopefully, this time will be better.

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