Higher margin norms likely to affect derivatives segment volumes

In what may impact volumes and reduce leverage in the market, brokers will collect much higher margins from clients trading in the derivatives segment from Monday.

Over the past few months, the Securities and Exchange Board of India (Sebi) has raised the margin requirement thrice, effectively increasing it by 40-50 per cent.

Options writers, especially those writing out of the money options, and arbitrageurs, who attempt to profit from price inefficiencies, will be hit the most. 

"Such a large margin increase has come as a shock because of the quantum of the hike, at such a short notice. Recently, exchanges levied Additional Surveillance