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SEBI tightens expiry-day margins for single-stock derivatives; calendar spread benefit withdrawnSEBI has withdrawn calendar spread margin benefits on the expiry day for single-stock derivatives to curb sudden margin shocks, aligning rules with index derivatives and strengthening risk management.By Sheersh Kapoor  February 5, 2026, 8:40:26 PM IST (Published)2 Min ReadMarkets regulator SEBI has tightened margin norms for single-stock derivatives, withdrawing calendar spread margin benefits on the day of expiry for contracts maturing that day. The move aims to reduce the risk of abrupt margin shortfalls and market disruption.

In a circular issued on Thursday, SEBI said positions involving a contract expiring on a given day will no longer be eligible for offsetting margin benefits during that trading session. Calendar spread margin calculations will remain unchanged for all other expiries.

A calendar spread typically involves holding offsetting positions in the same stock across different expiries, allowing traders to post lower margins as risks partly offset each other. However, SEBI noted that on expiry day, once one leg of the spread ceases to exist, traders are left exposed to sharp price movements in the remaining position.

The regulator said the decision followed concerns raised by trading members and deliberations with SEBI’s Secondary Market Advisory Committee. Removing the benefit on expiry day is intended to prevent sudden spikes in margin requirements after expiry and give brokers and clients adequate time to arrange additional margins, roll over positions, or close them.

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Under the revised framework, any spread involving the expiring contract will attract full margins on that day. Spreads between non-expiring contracts — such as next-month and far-month positions — will continue to qualify for margin relief.

The new norms align single-stock derivatives with existing rules for index derivatives and will come into effect three months from the date of the circular, or May 5, 2026. Stock exchanges and clearing corporations have been asked to make necessary system and byelaw changes.

(With agency inputs)Continue ReadingTagsDerivativesnew sebi rulesSEBI