Tight funding norms for prop traders may hit expiry day volumes

The RBI's stricter collateral norms, effective 1 July, require proprietary traders to provide 100 percent collateral to access bank funding for stock market trading, replacing the earlier 25 percent cash plus share collateral structure. Brokers warn this will reduce trading volumes in weekly Nifty and Sensex options on expiry days, potentially shifting volumes to foreign traders over time.