Professional Documents
Culture Documents
Trading
By:
Aashi Sehrawat (00216659317)
Gajender Kumar Kushwah (01516659317)
Kamesh Bansal (02316659317)
Introduction
• What are Derivatives?
• History
Minimum 50 members.
The clearing and settlement of derivatives trades would be through a SEBI approved clearing
corporation/house.
Derivative brokers/dealers and clearing members are required to seek registration from SEBI.
These authorized users can be individuals, registered partnership firms or corporate bodies as defined
under the Companies Act, 1956.
Authorized persons cannot collect any commission or any amount directly from the clients.
Approved users on the F&O segment have to pass a certification program which has been approved by
SEBI.
– The gross open position for each client, across all the derivative
contracts on an underlying, should not exceed 1% of the free float
market capitalization (in terms of number of shares) or 5% of the open
interest in all derivative contracts in the same underlying stock (in
terms of number of shares) whichever is higher.
– 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 is 20% of the number of shares held by non
promoters in the relevant underlying security i.e. 20% of the free–float
in terms of no. of shares of a company.
– This limit is applicable on all open positions in all futures and option
contracts on a particular underlying stock.
4. Reporting of Client Margin
Clearing Members (CMs) and Trading Members (TMs) are required to collect upfront
initial margins from all their Trading Members/ Constituents.
CMs are required to compulsorily report, on a daily basis, details in respect of such
margin amount due and collected, from the TMs/ Constituents clearing and settling
through them, with respect to the trades executed/ open positions of the TMs/
Constituents, which the CMs have paid to NSCCL, for the purpose of meeting margin
requirements.
TMs are required to report on a daily basis details in respect of such margin amount
due and collected from the constituents clearing and settling through them, with
respect to the trades executed/ open positions of the constituents, which the trading
members have paid to the CMs, and on which the CMs have allowed initial margin limit
to the TMs.
Thank you