Market regulator's new margin norms may give boost to dabba trading

New margin norms may spur a parallel market where trades are done on exchanges but settled off-market

The Securities and Exchange Board of India’s (Sebi’s) new margin norms may spur ‘dabba trading’ in equities — a parallel market where trades are done based on prices quoted on exchanges but settled in cash off-market.

The rise in futures and options (F&O) contract sizes, along with higher margin requirements, has goaded investors to move to this platform since the past year, said market players. They added that the requirement for upfront margins could push more investors to this segment.

“Dabba trading is catching on like wildfire. Terminals are being circulated, mobile apps are being created, and people being hired