MUMBAI, Feb. 5 -- The Securities and Exchange Board of India (Sebi) has tightened margin rules for traders in single-stock derivatives, withdrawing a key margin benefit on expiry day to curb the risk of sudden margin shortfalls and potential market disruption.

In a circular issued on Thursday, the market regulator said calendar spread margin benefits will no longer be available on the expiry day for single-stock derivative contracts that mature that day. The move aligns single-stock derivatives with existing rules for index derivatives and will take effect in three months.

A calendar spread is a common strategy in which a trader takes positions in the same stock with different expiry dates, typically buying one contract and selling anot...