1. The December 2025 Hard Deadline: What’s New?
The most critical change this December is the removal of the ‘Next Day Compliance’ buffer. Previously, traders had a one-day grace period to adjust their positions if they breached Market Wide Position Limits (MWPL) or personal delta limits.
Key updates effective now:
Delta Limits: Gross long and short delta limits are strictly capped, impacting liquidity and large-scale options selling strategies.
As of December 2025, the Indian derivatives market has entered its most significant regulatory phase yet. With SEBI’s final glide path for index options ending on December 6, 2025, retail traders are now operating under a “Hard Limit” regime. This means no more grace periods for excess delta positions and stricter intraday monitoring that could trigger immediate margin calls.
Zero Grace Period: Positions must be compliant by the end of the same trading day.
Enhanced Intraday Monitoring: Exchanges are now conducting multiple random snapshots to check for exposure violations.
If you are an options trader in India, your strategy for 2026 cannot be the same as it was in 2024. In this post, we break down exactly what has changed this month and how you should adapt your trading plan to stay profitable and compliant in the new year.
2. Strategy Shifts for 2026
In this new environment, retail traders must shift from pure speculation to risk-managed setups.
What you should do now:
- Shift to Defined-Risk Spreads: Instead of naked option selling, use Bull Call Spreads, Bear Put Spreads, or Iron Condors. These have capped losses and often better margin treatment under the new rules.
- Maintain a Cash Buffer: Since intraday monitoring is random, keeping a 15-20% cash buffer in your trading account is no longer optional—it’s a necessity to avoid auto-liquidation.
- Focus on Liquid Indices: Stick to Nifty 50 and Bank Nifty where bid-ask spreads are tight and liquidity is high enough to handle sudden volatility.
3. Commodity Outlook: Copper and Natural Gas
As we look toward 2026, commodities like Copper and Natural Gas are showing strong technical patterns. Industrial demand for copper remains a key theme for the new year. Traders should watch for breakouts on the MCX and align their positions with global inventory reports.
Final Thoughts
December 2025 is a turning point for the Indian stock market. While the new SEBI rules might seem restrictive, they are designed to bring maturity to the derivatives segment. By adapting your strategy early and focusing on risk management, you can navigate these changes successfully.
What are your thoughts on the new F&O limits? Let us know in the comments below!
Disclaimer: Trading in derivatives involves high risk. This post is for educational purposes only. Always consult a SEBI-registered advisor before making investment decisions.