NSE sets limits for volatile derivatives counters
Mumbai: National Stock Exchange (NSE), where the volumes on the futures and options are the highest, is expected to fix market-wide position limit for its members in the derivatives segment.

The respective limits were already in place since November last, but were not invoked as the overall interest in futures and options segment was not too large.

The market-wide position limit is based on the formula given by the Securities and Exchange Board of India (Sebi). Accordingly, the market-wide position limit is 30 times the average turnover of the previous month or 10 per cent of the non-promoter holding, whichever is lower. If the trading interest crosses 70-80 per cent, the exchange calls for higher risk array margins and slaps around 2-1/2 times the margins if the 90 per cent limit is crossed. No fresh positions are allowed if 100 per cent limit is crossed.
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