In a consultation paper released on Monday, the market regulator said the move is part of its broader ease-of-doing-business initiatives and seeks to bring greater predictability to the availability of options strikes across segments, including equity, currency and commodities. SEBI noted that exchanges currently follow their own methodologies for introducing and managing option strike intervals, apart from existing regulations governing long-dated index options.
The regulator highlighted that sharp intraday market movements can sometimes push underlying prices beyond the farthest available strike price, leaving traders without suitable options contracts around the prevailing market level. Such situations can disrupt trading activity and create operational challenges for market participants.
To address this, SEBI has proposed that stock exchanges establish a standardized framework covering the introduction of a minimum number of in-the-money and out-of-the-money options contracts, daily reviews of available strikes around prevailing market prices, and the periodic removal of strike prices that are significantly away from current market levels.
A key proposal is to allow exchanges to introduce new strike prices intraday during market hours in the direction of price movement in the underlying asset or futures contract. SEBI said the mechanism should be designed in a way that does not require brokers or market participants to make system changes during live trading sessions.
While laying down broad principles, the regulator has proposed giving exchanges flexibility in determining operational details such as strike intervals, the minimum number of options contracts to be listed and whether wider strike intervals should be maintained for contracts far from the prevailing market price. Exchanges will also be required to publish their frameworks on their websites and review them periodically in consultation with market participants.
The proposed framework would apply across all options segments, with exchanges permitted to tailor specific rules for different asset classes based on liquidity and participation levels. SEBI further proposed discontinuing an existing provision under its Master Circular on Stock Exchanges and Clearing Corporations once the new framework is implemented.
The regulator has invited public comments on the proposals until June 15, 2026. Interested stakeholders can submit their feedback through SEBI’s online consultation platform.
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