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Which measure introduced by SEBI aims to reduce speculative trading during the expiry of options contracts?
  • a)
    Increasing the minimum contract size for index futures
  • b)
    Rationalisation of weekly Index derivatives products
  • c)
    Upfront collection of options premium
  • d)
    Increased tail-risk coverage on expiry days
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Which measure introduced by SEBI aims to reduce speculative trading du...
The increased tail-risk coverage on expiry days involves applying an additional 2% Extreme Loss Margin (ELM) to short-options contracts to mitigate risks associated with heightened speculative activities. This measure aims to discourage aggressive trading practices that often lead to extreme price movements and significant losses, particularly for retail investors. A notable aspect of this reform is its focus on creating a more stable trading environment by reducing volatility during critical trading periods, which can be particularly risky for inexperienced traders.
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Which measure introduced by SEBI aims to reduce speculative trading during the expiry of options contracts?a) Increasing the minimum contract size for index futuresb) Rationalisation of weekly Index derivatives productsc) Upfront collection of options premiumd) Increased tail-risk coverage on expiry daysCorrect answer is option 'D'. Can you explain this answer?
Question Description
Which measure introduced by SEBI aims to reduce speculative trading during the expiry of options contracts?a) Increasing the minimum contract size for index futuresb) Rationalisation of weekly Index derivatives productsc) Upfront collection of options premiumd) Increased tail-risk coverage on expiry daysCorrect answer is option 'D'. Can you explain this answer? for CLAT 2024 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about Which measure introduced by SEBI aims to reduce speculative trading during the expiry of options contracts?a) Increasing the minimum contract size for index futuresb) Rationalisation of weekly Index derivatives productsc) Upfront collection of options premiumd) Increased tail-risk coverage on expiry daysCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CLAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which measure introduced by SEBI aims to reduce speculative trading during the expiry of options contracts?a) Increasing the minimum contract size for index futuresb) Rationalisation of weekly Index derivatives productsc) Upfront collection of options premiumd) Increased tail-risk coverage on expiry daysCorrect answer is option 'D'. Can you explain this answer?.
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