From Zomato to Jio Finance, these stocks may soon enter the F&O space
As per the new norm announced by the Securities and Exchange Board of India, 65 stocks can be added to the futures and options segment, while only 25 can be excluded.
According to Nuvama Alternative & Quantitative Research, there are only possible additions and exclusions to the list of stocks, as the final decision rests with the market regulator.
On Thursday, Sebi announced revised norms for inclusion of equities as futures and options contracts with amendments in four areas:
The average daily market capitalisation and average daily trading volume should be in the top 500 over the past six months.
The average quarter sigma order size should be more than Rs 75 lakh over the past six months. The quarter-sigma order size of a stock is the minimum order that can change the stock price by a quarter of its standard deviation.
The market-wide position limit should be more than Rs 1,500 crore. This is the maximum number of derivative contracts that can be opened for a particular stock. It is calculated by taking into account the lower of the following two metrics: 30 times the average number of shares traded per day during the previous calendar month, or 20% of the free float shares (those not held by promoters).
In the cash market, there should be more than Rs 35 crore in average daily deliveries. Deliveries are a specific kind of transaction. where shares are bought with the intention of transferring them to one’s demat account, rather than intraday trades where the transaction is sold at or before the end of the trading period on the same day.
