Learn Institutional options trading Part-4

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SEBI Regulations & Reforms
SEBI has made multiple reforms to ensure safe and transparent options trading:

Peak Margin Requirements – Traders must maintain full upfront margin.

Ban List – Illiquid stock options are periodically banned.

Lot Size Revisions – To control leverage and speculation.

Options Chain Transparency – Exchanges provide real-time data.

Investor Education Initiatives – Workshops, certifications, and sandbox testing.

Risks in Options Trading'

Options can generate high rewards, but they carry significant risks, especially if misused without understanding.

Key Risks:
Premium decay

Volatility risk

Leverage risk

Liquidity issues in stock options

Wrong position sizing

SEBI has introduced risk-mitigation measures, such as margin rules and banning of certain contracts for illiquid stocks.

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