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ICICI Securities expects 10 stocks to enter the derivatives segment soon. They are: SBI Life Insurance, HDFC Life Insurance, ICICI Lombard General Insurance, Bandhan Bank, Avenue Supermarts, HDFC Asset Management Company, Godrej Properties, Info Edge India, Oberoi Realty and Reliance Nippon Life Asset Management.
"NSE has not introduced new scrips in F&O in the last couple of years. On April 30, 2019 three stocks -- PNB Housing Finance, MphasiS and Larsen & Toubro Infotech -- were included in F&O. However, the exchange withdrew the circular on May 29, 2019. Thus, expecting a time line for the new inclusion may not be feasible," I-Sec said in a release.
ICICI Securities said it believes the upcoming Nifty rebalancing may be a trigger for inclusion of a few stocks in the F&O segment.
Stocks that are not in F&O may not be part of Nifty. The next Nifty rebalancing will be announced in February 2020. "We can expect an announcement of the stock’s inclusion in F&O in the current calendar year," it added.
"From a data perspective, we believe these stocks qualify for F&O inclusion. A few stocks from this list may be announced in the expected forthcoming announcement," the broking firm said.
Eligibility Criteria
The eligibility of a stock for inclusion in the derivatives segment is based on the criteria laid down by SEBI through various circulars issued from time to time.
Accordingly, the stock should be chosen from among the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six months on a rolling basis; the stock's median quarter-sigma order size over the last six months should not be less than Rs 25 lakh.
For this purpose, a stock's quarter-sigma order size is the order size (in value terms) required to cause a change in the stock price equal to one-quarter of a standard deviation.
The market wide position limit in the stock should not be less than Rs 500 crore on a rolling basis. The market wide position limit (number of shares) would be valued taking the closing price of stocks in the underlying cash market on the date of expiry of contract in the month. The market wide position limit of open positions (in terms of the number of underlying stock) on futures and option contracts on a particular underlying stock, should be 20 per cent of the number of shares held by non-promoters in the relevant underlying security i.e. free-float holding.
The average daily delivery value in the cash market should not be less than Rs 10 crore in the previous six months on a rolling basis. The average daily deliverable value should be computed taking the deliverable quantity in line with the client level as computed by NSE Clearing Ltd on a daily basis and close price of the trade date.
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