SEBI Proposes Price Bands For F&O Stocks To Curb Volatility

The Securities and Exchange Board of India (SEBI) has proposed price bands for all futures & options (F&O) stocks, seeking to curb excessive price volatility in equity scrips that have derivative instruments available for trading. SEBI noted in a latest paper that an examination of the price movements of F&O stocks in the past six months showed that 40 scrips witnessed intra-day movement of more than 20%: Of this, 29 scrips saw intra-day movements between 20% and 30%. It further said that five stocks moved between 30% and 40% and six more than 40%. It cautioned that concerns have been raised that investor wealth is getting wiped out in a single day by recent falls in stocks for which derivative products are available, as no price bands or circuit filters are applicable on them.

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