SEBI allowed to extend F&O trading till 11:55 p.m from Oct. 1 (poll only)

[headstrong007]

@Loss_Lover,
Already high volume trader like us facing a liquidity problem in future market as more and more volume shift is happening to options... You are advising for another exchange!!
With the separate exchange idea, bid-ask would be wider and more impact cost. And what about Index F&O trader who wants to cut positional risk at night using longer trading hour!
See the following comment.

The volumes may get scattered at different time slots, Ajay Menon, CEO, Broking & Distribution, Motilal Oswal Securities Ltd. said in a note. “This may cause comparatively lesser trading depth for certain stock futures.”

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Also, a big portion of big investors need F&O for hedging at night. It's a long-term demand pending. Dividing capital in multiple exchanges is also not a good idea for big investors for money management purpose. If they are trading NSE cash, then they would like to hedge the position using NSE F&O (same exchange).

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Extending the trading hour is long-term demand from high volume investors and FII-FPI's.
They want Indian market in line with the International market so that they can hedge their portfolio systematically.
It is going to happen.
No one is forcing anyone to trade 15hour. Traders can close position when cash market close.

The market is the jungle, let's give every one equal opportunity for living. Let the fish swim and bird to fly and the wild animals can search for their food at night. No one is forcing fish to fly!

Big gap up and gap down already happening due to aftermarket various night events, US EU market action. Currently, volatility is very high due to the short duration of the market, Gap up Gap dn @ opening nothing new to traders/investors.

 

[Newbie Day-Trader]

Sorry. Double post.

 

[Newbie Day-Trader]

@Loss_Lover,
Already high volume trader like us facing a liquidity problem in future market as more and more volume shift is happening to options... You are advising for another exchange!!
With the separate exchange idea, bid-ask would be wider and more impact cost. And what about Index F&O trader who wants to cut positional risk at night using longer trading hour!
See the following comment.

The volumes may get scattered at different time slots, Ajay Menon, CEO, Broking & Distribution, Motilal Oswal Securities Ltd. said in a note. “This may cause comparatively lesser trading depth for certain stock futures.”

This is why, both, extending trading-hours as well as restricting retail participation, could be bad for larger individual as well as institutional traders. It'll spread out the Futures volumes & widen the spreads further since now, the volumes will be scattered out over 15 hours instead of just 6:15 hours. Already, the spreads are relatively wide on many stock-futures, due to bigger lot-sizes, & these proposed changes could make the situation worse.

 

[headstrong007]

@ Newbie Day-Trader,
Every new thing takes time to get popularity. I see most of them want Index Future to come first then after 6 months or so stock future. Stock F&O can wait.
SEBI already want to cut F&O list as short as possible, selected 46 stocks in the first phase.
They want to concentrate volumes in few high volume stocks only.

NSE-BSE-SEBI-Govt all expect new volume will come at night slowly from the separate set of traders who don't able to trade at night and options volume is going to increase substantially.
At night we can get a new set of salaried gamblers especially in options trading. Lets wait and watch the real action.

 

[Newbie Day-Trader]

@ Newbie Day-Trader,
Every new thing takes time to get popularity. I see most of them want Index Future to come first then after 6 months or so stock future. Stock F&O can wait.
SEBI already want to cut F&O list as short as possible, selected 46 stocks in the first phase.
They want to concentrate volumes in few high volume stocks only.

NSE-BSE-SEBI-Govt all expect new volume will come at night slowly from the separate set of traders who don't able to trade at night and options volume is going to increase substantially.

Well, not every new thing becomes popular though. Based on the video you have posted in the other thread, even the BSE CEO isn't sure right now as to whether it's going to be only Index F&O or would it also include Stock F&O; either way, the volumes could still become scattered & spreads may widen; it'll be great if that doesn't happen but I'm not sure if there's any reason to be optimistic about that. Personally, I don't trade Index derivatives, so I could care less about them, so long as volumes from Stock derivatives don't shift to Index derivatives due to Index derivatives trading longer than Stock derivatives. Yes, reducing the number of stock derivatives could concentrate volumes in the remaining stock derivatives BUT any such benefit might be offset/diluted by longer trading-hours.

 

[Loss_Lover]

I have no problem with long trading hours - never switch off the fan. Who cares!

But the issue lies in varied timings for CM and its Derivatives. The Derivatives will lose its underlying basis and would be wide open in the wild for pure gambling.

At the end of the day, we retailers cannot create impact in the market but the institutions and big players can and they will - we are in the markets to simply participate either to get burned or to fly high .... Choice of strategy is always open and debatable.

BTW I like when you say

At night we can get a new set of salaried gamblers especially in options trading.

 

[vikas2131]

I have no problem with long trading hours - never switch off the fan. Who cares!

But the issue lies in varied timings for CM and its Derivatives. The Derivatives will lose its underlying basis and would be wide open in the wild for pure gambling.

At the end of the day, we retailers cannot create impact in the market but the institutions and big players can and they will - we are in the markets to simply participate either to get burned or to fly high .... Choice of strategy is always open and debatable.

BTW I like when you say

It would utterly stupid to open CM for 15 hours. It will expose a lot of people to risks while they are sleeping . Nowhere in world CM is open for 15 hours. Best thing would be to just stick with index derivatives .

 

[headstrong007]

All over the world its only derivative market which gets an extension. No question of 15 hr CM.
SEBI already gave the permission for extending Equity cash till 5 pm. But, no one is interested.

The derivative is mainly for hedging, but no one can deny that all over the world F&O is used mainly for speculation.
But some of the big players desperately need the systematical hedging at night too we can't deny that also. And short sell is also part of the game, we cant make positional short using delivery, so F&O market always has an advantage over CM. It is more popular, most people want to extend that timing.

In my opinion, starting Stock F&O at the beginning is not a good idea. Let's concentrate the volume on Index first. Wath the bid-ask spread and impact cost at night. Any new thing takes time for popularity. Stock F&O may wait, at least for 6 month. And the implementation of stock F&O is good in a phased manner like Nifty 50 or high volumes stocks first. Then let's watch the effect and progress.

 

[bpr]

Please understand the reason CM is not extended becuase there is no threat to cash market by SGX

 

[jagankris]

Please understand the reason CM is not extended becuase there is no threat to cash market by SGX

Only Nifty Index alone is traded in SGX so why then extend Equity derivatives ?