Margin for new Nifty lot size?

[umeshmandal]

Reasons are debatable. There are pros and cons ...lot can be argued in favour and against. But it is futile to argue on something which is inevitable.

The decision of charging SEBI tax ( it came in 1992) was also contested in Mumbai High Court and Supreme Court. The courts ruled in favour of SEBI.

This decision if contested in Courts by way of court petition, I am sure it will be struck down. Let some investor/trader bodies try it. Lot size is administrative decision between SEBI and Stock Exchanges and Courts never interfere in such administrative decisions.

Smart_trade

Why call it inevitable?? There are rulings about law which have differed from Judge to judge! Its all about interpretation and the end result sought for enactment of law! One of the reason for formation of SEBI was to safe guard Small Investors.
Arguments would fly both ways as said by you, both for and against! SEBI would say they increased the size to discourage the Small investor from speculating ! It can also be argued that there is no set crieteria who trades in FnO, so by increasing the size SEBI is in fact exposing small traders to bigger risk!
My contention is simple : FnO are instruments for hedging, so why make it an instrument useful for FII, DII or HNI's ! Why not also Small Investors? Why not allow them to hedge their portfolio too??
We do not ban Smoking, alcohol and even betting in Horse races which are all bad for citizens ! On tobacco we have is a Warning and all that grew big was the SIZE of the warning message! Let there be appropriate Warnings in case of FnO too , why not increase the size or frequency of warning! Let there be a BOLD sized warning on all FnO Contracts issued!
The fact is that the Lot size should be reduced ! Persons with appropriate means should fight it out ! I even told my Broker to write to SEBI, FM and NSE but they are sissies, fear that there would be retribution if they do it!

If it can be done, though an impossible thing I know, but suppose it is done : All NSE members write to NSE giving a Notice to surrender their FnO membership from the date the New Lot sizes are applicable !

 

[patrader]

Lot size is administrative decision between SEBI and Stock Exchanges and Courts never interfere in such administrative decisions.

Smart_trade

No doubt it is an administrative decision, but it is aimed at keeping someone out from participating in something, which is discrimination under the guise of protecting them.

 

[umeshmandal]

Most of the objections are coming from traders who want to sell options and they now will need larger margins of 70-80 K. For an investor who wants to hedge his portfolio against market risk, he can still buy puts at Rs 100-150 so for 75 Nifty he will need Rs 7500-Rs 10,000 and nay investor having a portfolio to protect can definately pay 10 K for hedge. And if 10 K is unaffordable, they should participate in the market through mutual funds route.

Smart_trade

Why should Govt try to tell me how I participate in the market !? They should regulate the Exchanges and their members, why individual traders! Why only option writers, people entering Future contracts have also to handle bigger lot sizes ! There are people, may be small in number, who safe guard their holding by selling future contracts, or Nifty !
SEBI should have reduced the lot size and did the reverse !

 

[Smart_trade]

Let us wait and see if there is any court ruling if some trader body files a petition....but are we really convinced on this "hedging by small investors " argument ?? Will the Courts buy this argument...not too sure.

ST

 

[rh6996]

Let us wait and see if there is any court ruling if some trader body files a petition....but are we really convinced on this "hedging by small investors " argument ?? Will the Courts buy this argument...not too sure.

ST

Very true Sir! Its a weak and slim argument but worth a try ! In a country where the weaker section gets priority just because they are weak and no other merit, may be it works here too!

 

[Smart_trade]

Why should Govt try to tell me how I participate in the market !? They should regulate the Exchanges and their members, why individual traders! Why only option writers, people entering Future contracts have also to handle bigger lot sizes ! There are people, may be small in number, who safe guard their holding by selling future contracts, or Nifty !
SEBI should have reduced the lot size and did the reverse !

Very true Sir! Its a weak and slim argument but worth a try ! In a country where the weaker section gets priority just because they are weak and no other merit, may be it works here too!

If people feel so strongly then why not file a petition in the High Court ...it does not necessarily need big money.Traders can file a petition. I have fought and won a case against a Stock Exchange in Mumbai High Court and the total expenses were less than 15-20 K ( telling from my own experience ). I am sure traders can pool in 50 K -1 L by contributing Rs 500 each and file a petition.

Smart_trade

 

[patrader]

Let us wait and see if there is any court ruling if some trader body files a petition....but are we really convinced on this "hedging by small investors " argument ?? Will the Courts buy this argument...not too sure.

ST

Its not just hedging, but even simple participation in Futures market is being allowed in a way.

 

[Obelixtrader]

People who do not understand markets they decide what is good for investors and traders. Dont trade at least 1 week maybe it helps and stupid byrocrats will change opinion.

 

[vijayanscbe]

If people feel so strongly then why not file a petition in the High Court ...it does not necessarily need big money.Traders can file a petition. I have fought and won a case against a Stock Exchange in Mumbai High Court and the total expenses were less than 15-20 K ( telling from my own experience ). I am sure traders can pool in 50 K -1 L by contributing Rs 500 each and file a petition.

Smart_trade

Some one start a Retail Traders Union, this is easy way to bother the politicians,officers etc.. Just kidding.

But we can file an RTI , like on which reports or records they came to conclusion retail traders losing with small contracts size, If they show some proof, then put another RTI to show the retail traders loss in stock/equity investments. you need any friendly advocates to discuss points, filing RTI costs only registered post expenses. RTI is powerful weapon, they have to answer with in stipulated time periods, no lame excuse allowed.

 

[patrader]

Some one start a Retail Traders Union, this is easy way to bother the politicians,officers etc.. Just kidding.

I think this is a good idea. Not for bothering purpose, but definitely for rights.

And are mutual funds a "Guaranteed source of income"?