SEBI has proposed to review the selection criteria for stock entry and exit in the derivatives market. The proposed rules require derivatives contracts on individual stocks to have adequate liquidity and trading interest from market participants. SEBI stated that without sufficient depth in the underlying cash market and appropriate position limits around leveraged derivatives, there can be higher risks of market manipulation, increased volatility, and compromised investor protection.

The proposed rules include increasing the Median Quarter Sigma Order Size from Rs. 25 lakh to Rs. 75 lakh-1 crores, raising the market-wide position limit from Rs 500 crores to Rs. 1,250 crore-1,750 crores, and introducing the Product Success Framework (PSF) for single-stock derivatives that have completed at least 6 months from the month of introduction. This is required to ensure stocks have sufficient turnover, open interest, and widespread participation. The stock’s ADDV (average delivery daily value) in the cash market segment minimum for the previous six months should be Rs. 30-40 Cr, up from the current limit of Rs. 10 crores. If a stock fails to meet these criteria for 3 consecutive months, there would be an exit and no new contracts would be issued for that stock. For full details, follow this link.

As per our analysis, 161 stocks will continue to remain in the F&O segment, and there are 23 stocks that could face exit from the F&O segment if the proposed criteria are implemented. There are 73 stocks that have a probability of entering the F&O segment if the proposed criteria are implemented.

Following are stocks that could face exit from the F&O segment.

Following is a probable list of stocks that may enter F&O segment if the proposed criteria are implemented.

According to us, the following is a list of stocks that will remain in the F&O segment.