TSO, please tell me about SEBI's intention to increase contract value. Is this going to effect retail traders like me? Do you know more about this matter apart from what was in ET?
Hello classifiedindian,
LC Gupta committee report was given around 14 years ago and due to this reason the regulator is of the view that the contract size should be increased in line with the inflation.
If the min contract value is increased it'll certainly impact all the concerned parties (many retail clients, brokerages and even stock exchange). A retail trader who wishes to buy an option to hedge his position might not be able to do so as he might not have Rs 5 Lacs in one single stock.
It might even affect the liquidity and might even hamper the price discovery mechanism.
So when the SEBI will put up the discussion paper for comments most likely these points (and more) will be given to them as a feedback.