History of F&O margin requirements in India
NSE introduced F&O in 2000 & today NSE is the largest derivatives exchange in the world by volume. Trading activity was mostly in futures until 2008. Options only became popular once contract sizes & margins went up. A brief history of F&O margins.
A key impetus for us starting Zerodha in 2010 was that there were discussions in the markets on SEBI introducing margin reporting and short margin penalty for not collecting sufficient margins for overnight F&O positions after the market collapse in 2008.
We thought we could potentially disrupt pricing if we didn’t have to compete with other brokers by offering high leverage and taking higher risks. This is what led to us launching a flat fee pricing model (of Rs. 20 per executed order in 2010) for the first time in India.