Derivatives and exposure limits · a SIF concept, explained from SEBI’s rules.
In one line
Buying, or selling, a call and a put on the same underlying and expiry: at the same strike (a straddle) or at different strikes (a strangle). All such strategies are permitted in SIFs.
All derivative strategies, including straddles and strangles, are permitted under SIF (FAQ B34). Only one leg is treated as offsetting: exposure is the higher of the call or the put (premium for bought options, notional value for sold ones). The exposure of a short straddle or short strangle, after this offset, counts toward the 25% unhedged short limit (B35).
Sources: SEBI FAQs on SIFs, Parts B and C, 22 Sep 2026
SEBI's illustration. ABC trades at ₹1,210 with a lot of 500; its 1200 call costs ₹10 and its 1200 put ₹5. A long straddle (buy both) has gross exposure of ₹7,500 and ₹5,000 after the offset. A short straddle (sell both) counts each leg at ₹6,05,000 (₹1,210 × 500), ₹12,10,000 gross, and ₹6,05,000 after the offset (FAQ B35).
Every SIF strategy type, within each strategy’s own offer document. All 36 live strategies are listed on our tracker; each one’s offer document sets its own limits within SEBI’s.
Yes. The exposure from a short straddle or short strangle, after the permitted offset, counts toward the 25% unhedged short limit (FAQ B35).
Explanation only, not a recommendation. Trustner Asset Services Pvt. Ltd. is an AMFI-registered Mutual Fund & SIF Distributor (ARN-286886) and may receive commission from fund houses. Investments in Specialized Investment Fund involves relatively higher risk including potential loss of capital, liquidity risk and market volatility. Please read all investment strategy related documents carefully before making the investment decision.