New NSE equity derivative rules may reduce volatility: Analysts

National Stock Exchange's (NSE) new rules on matching equity derivatives' orders as per reference price and execution range, starting May 5, are seen reducing error based volatility in the market, analysts say.

"Orders shall be matched and trades shall take place only if the trade price is within the reference price and execution range," NSE said in a circular on Friday.

"The guidelines augur well for better functioning of the market, as it would reduce the possibility of error led spike or kink in price of F&O participating stocks. This mechanism should come in very handy for smaller participants in the options segment as well," said Bhavin Desai, equity derivatives analyst Motilal Oswal Securities Ltd.

Also, India's capital markets regulator said in October it would unveil regulations for the cancellation or modification of trades arising from any instances of errant, or freak, trades on the country's stock exchanges.

India has experienced several instances of market glitches, including a flurry of erroneous orders placed by broker Emkay Global Financial Services last October, that have rattled confidence in the trading systems of the country's exchanges.

EDITORIAL OF THE DAY

  • India’s political space acts as a safety valve for maverick politicians and frustrated electorate

    While it is easy to be cynical about Indian democracy and its ways, the fact is that the vast political space that the system provides for in this cou

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Taslima Nasreen

Bangladesh no country for atheists

It’s a matter of pride to be a freethinker, atheist ...

Purnendu Ghosh

Silence makes you aware of yourself

Often, we don’t feel the necessity of making contact with ...

Shona Adhikari

Artistic focus on women's empowerment

The focus on the girl child remains an important one ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture