homemarket Newscommodities NewsSEBI's new rules for commodity derivatives market will help arbitragers, retail clients: ICICI Sec
SEBI's new rules for commodity derivatives market will help arbitragers, retail clients: ICICI Sec
Securities and Exchange Board of India (SEBI) has introduced a cross margin benefit of 75 percent between commodity index futures and their underlying futures. “This is a welcome step by SEBI in the development of commodity markets. This step will help arbitragers as well as retail customers,” Ramesh Varakhedkar of ICICI Securities said in an interview with CNBC-TV18.
Securities and Exchange Board of India (SEBI) has introduced a cross margin benefit of 75 percent between commodity index futures and their underlying futures.
Cross margins allow markets participants to reduce the total margin payment required if they are taking two mutually offsetting positions. This would help market participants to transfer excess margin from one account to another.
Analysts believe this step will help both retail investors and arbitragers.
“This is a welcome step by SEBI in the development of commodity markets. This step will help arbitragers as well as retail customers,” Ramesh Varakhedkar of ICICI Securities said in an interview with CNBC-TV18.
"With this both the indices and underlying commodities market should become liquid as the margins will come down, he added.
Varakhedkar believes the traction will be more on the bullion index, which is gold and silver.
(Edited by : Yashi Gupta)
First Published: Jul 1, 2021 2:40 PM IST
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