Trading in Derivatives? 45 New Stocks Added to the NSE F&O List

Eligibility Criteria for Stocks Entering the Derivatives Segment

To ensure that only high-quality stocks with a sufficient market presence are allowed to trade in the derivatives segment, the Securities and Exchange Board of India (SEBI) revised the eligibility criteria for entry and exit of stocks in the derivatives segment. The following are the criteria: 

1. Median Quarter Sigma Order Size: This figure, calculated over the previous six months on a rolling basis, should not be less than ₹75 lakh.
2. Market-Wide Position Limit: This limit, also assessed over the previous six months on a rolling basis, should not be less than ₹1,500 crore.
3. Average Daily Delivery Value in the Cash Market: The value, over the preceding six months on a rolling basis, should not be less than ₹35 crore.

The requirements for these three criteria were raised threefold. In addition, factors like surveillance, investigation, or administrative concerns are also taken into account when considering a stock for introduction into the derivatives segment. 

The F&O segment provides investors with the ability to trade in derivatives based on the underlying value of a stock, allowing them to leverage positions with lower capital requirements. This addition to the F&O segment allows investors to use these financial instruments with a wider range of stocks. However, analysts are advising traders and investors to exercise caution as these stocks will not be subject to circuit filters, which are price bands that limit price fluctuations.