New OTR Framework for Equity Options from April 6: Exchanges Issue Circular

• Exchanges will implement a modified Order-to-Trade Ratio (OTR) framework for equity options starting April 6.
• The new framework eases compliance for traders and exempts algorithmic orders by designated market makers from OTR penalties.
• NSE circular states orders within ±40% of LTP for options premium, or ±INR 20 (whichever is higher), are exempt from OTR penalties.
• This is a significant relaxation from the previous narrow exemption band of 0.75% around the last traded price.
• The changes, following SEBI consultations, aim to improve market efficiency and deter manipulative trading.

Key Questions Answered

How will new OTR rules impact options trading?

New OTR rules from April 6 will ease compliance for equity options traders by exempting orders within a wider range of ±40% of the last traded price (LTP) or ±INR 20, whichever is higher.

Will market makers benefit from OTR exemptions?

Yes, market makers are expected to benefit from OTR exemptions.

What changes for equity futures and cash segments?

Starting April 1, 2026, the Metropolitan Stock Exchange (MSE) has implemented liquidity enhancement measures in its equity segment to boost trading activity and price discovery.