Market Wide Position Limit

[learningcurve]

Hi, can anyone tell me about the following:

1) what is meant by Market Wide Position Limit in derivatives ?.

2) who sets the Market Wide Position Limit for derivatives ?.


3) what are the reason for setting up the Market Wide Position Limit for
derivatives?.


With regards,

Learningcurve

 

[himpor]

hi

what does the percentage of the open position suggest.

lets say for a stock Shipping corp of india , the percentage of open positions is 6 percent of market wide position.
what does this means

hp

 

[amik]

Though the posts are quite old, thoughts to answer it if someone comes to this thread for the answer:

Market-wide limit: The market-wide limit of open position (in terms of the number of underlying stock) on futures and option contracts on a particular underlying stock shall be lower of

* * 30 times the average number of shares traded daily, during the previous calendar month, in the relevant underlying security in the underlying segment,

Or

* * 20 per cent of the number of shares held by non-promoters in the relevant underlying security i.e. free-float holding.

This limit would be applicable on all open positions in all futures and option contracts on a particular underlying stock.

 

[mit123007]

I know for stocks it is 20% of non-promoter holdings.

For indices how it is calculated? What it is for Nifty?

Is it there for Indices? (or only for stocks)

Anticipating reply

Thank You