Now Reading: Monthly expiry tests new stock auction system as Sebi bars two firms
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Monthly expiry tests new stock auction system as Sebi bars two firms
Indian traders face their first monthly derivatives expiry using auction-based end-of-day stock prices on Tuesday, a major test for a mechanism launched August 3. The system has drawn backlash over sharp swings and allegations of manipulation. The Securities and Exchange Board of India last week barred two firms, including a JPMorgan Chase unit, for allegedly manipulating prices during the auction.
Tuesday's expiry adds risk from physically settled single-stock options, where a sharp auction move can force investors to deliver shares or funds. Sebi has extended derivatives trading beyond the auction to let investors adjust positions. Many proprietary firms and high-frequency traders have stayed away, thinning auction volumes.
Indian Opinion Analysis
Both Livemint and BusinessLine carry the same wire copy, reporting identical facts and quotes about the auction-based expiry system. Coverage is uniform straight reporting with no discernible slant. The real test is Tuesday's monthly expiry: single-stock options physically settled mean a sharp price swing during the auction could force investors to deliver shares or funds. Sebi has already barred two firms for alleged manipulation. The key number to watch is auction volumes, low participation by proprietary traders will test whether the system can handle larger expiry-related positions without distortion.
Coverage: 2 sources, 2 neutral
Sources (2): livemint.com (neutral report), thehindubusinessline.com (neutral report)
This story was synthesised by AI from the 2 sources linked above. Methodology and corrections.
Updated: this story now draws on 2 sources.
