The Securities and Exchange Board of India (SEBI) is considering a proposal to establish a uniform framework for managing options strike prices. This initiative may include allowing exchanges to introduce new strike prices during market hours, according to sources familiar with the discussions.
This proposal arises from concerns regarding the current management of strike prices, particularly during periods of significant intraday price fluctuations. The existing system often struggles to address sudden price changes, leading to a disparity between available predefined strike prices and actual market prices, which can hinder effective hedging. Typically, new strike prices are implemented with a delay, exacerbating these issues.
A strike price refers to the predetermined level at which an options contract can be exercised. Having a range of available strikes and adequate liquidity enables traders to take positions based on their market expectations or hedge their existing exposures.
The proposed uniform framework aims to allow exchanges to introduce new strike prices during market hours, particularly in response to sharp movements in the underlying asset. This would eliminate the need for system modifications by brokers or market participants during live trading, thereby preventing operational disruptions.
Feroze Azeez, Joint CEO at Anand Rathi Wealth, noted, “Most of the time, especially around at-the-money (ATM) strikes, the market is fairly liquid and trades smoothly. But when the move is very sharp and sudden, prices can sometimes jump rather than move tick by tick.” He highlighted that during such instances, traders may encounter “phantom prices,” where the last traded price is visible, but executing at that specific level may not be feasible.
As intraday movements intensify, trading interest tends to gravitate towards strike prices that are closer to the current level of the underlying asset. However, the time required to add these strikes under the existing mechanisms can hinder trading, even as a number of distant strikes continue to be listed, according to an exchange source.
Market participants indicated that trading often concentrates around frequently used strike prices. Anand James, Chief Market Strategist at Geojit Investments, commented, “In such situations, if an out-of-the-money strike that fits the usual trading criterion is not available, traders typically shift to at-the-money or in-the-money options to ride the move.”
In rapidly changing markets, traders must accommodate potential slippage and actively manage their positions rather than relying solely on tight stop losses.
Currently, SEBI’s regulatory framework primarily governs long-dated index options, while other segments—such as stock, currency, and commodity options—follow exchange-specific practices, resulting in inconsistencies in how strike prices are managed. An inquiry sent to SEBI did not elicit a response.
While exchanges have their individual regulations for adding strike prices, the proposed framework aims to standardize practices across all exchanges. This proposal has been discussed with exchanges and intermediaries and will receive periodic reviews through consultations with market participants.
Published on April 28, 2026.
