SEBI's new move to cut retailers participation in F&O!

[headstrong007]

We don't need full-fledged operations of US, every market move as per US 30 future. You can check aftermarket SGX Nifty move along with US 30 future(below). It is the major force which drives all such world market when 'full fledge operations' of various Stock Exchanges starts.

https://in.investing.com/indices/us-30-futures-streaming-chart

 

[headstrong007]

ek do ghante mein kya ukhad lega jo pure din mein nahi kiya wali baat hai ye

After 3:30 pm 2 hour is enough to generate another big move. You can see major news for US or EU come in such 2 hr extension like today which can give another big move like today which we miss as our market is close. You can see a big move in US future come after two big news came 4:30pm and 5:15pm. Indian market missed that move but SGX nifty was 40+pt up in that time. If our market opened then it's intraday move of 40-50 pt extra, definitely extra opportunity.
See the after the market big US FUTURE move of today in next 2 hour.
Extending the market up to 6:30 PM(at least) using 10pm opening time or 1hr lunch break is a great idea. IMO.

 

[headstrong007]

https://www.sebi.gov.in/legal/circu...-for-stocks-in-derivatives-segment_38629.html

SEBI's above said lastest circular about review framework is not directly related to increased lot size.
But, my common sense is that, before increase lot size SEBI needs to eliminate low liquid stocks from the current F&O list also.
Above circular would automatically eliminate many low liquid stocks(some trader friendly stocks included) from the Current F&O list. So, there is absolutely no doubt that, silently SEBI is moving STEP by STEP closure to cut retailers participation in F&O.
Also, this circular came abnormally very fast(within few days) after it was proposed (when this thread was opened). Usually, SEBI takes 6month-12month to make final circular after something is proposed.

 

[vikas2131]

https://www.sebi.gov.in/legal/circu...-for-stocks-in-derivatives-segment_38629.html

SEBI's above said lastest circular about review framework is not directly related to increased lot size.
But, my common sense is that, before increase lot size SEBI needs to eliminate low liquid stocks from the current F&O list also.
Above circular would automatically eliminate many low liquid stocks(some trader friendly stocks included) from the Current F&O list. So, there is absolutely no doubt that, silently SEBI is moving STEP by STEP closure to cut retailers participation in F&O.
Also, this circular came abnormally very fast(within few days) after it was proposed (when this thread was opened). Usually, SEBI takes 6month-12month to make final circular after something is proposed.

My opinion:- they are testing waters by only doing physical settlement on selected stocks as of right now . Eventually they will do it to all the stocks which will itself reduce volume though sgx finding a loophole to continue offering sgx nifty might force their hands to an extent..

Btw SGX is also going to offer stock derivatives too.. unfortunately my liquidity concerns will come true. This is bad

https://economictimes.indiatimes.co...ck-based-derivatives/articleshow/63723852.cms

 

[headstrong007]

@vikas2131
All types of dirty plannings are going on to shift F&O volumes to CASH.
SEBI already said,
Sebi to make physical settlement mandatory in phased manner

***********
Sebi said that stocks which are in derivatives segment but do not meet the enhanced criteria will be physically settled and they will exit the segment if they fail to meet the eligibility criteria for three continuous months or a period of one year from the date of the circular.

“If physical settlement of stock options is a reality, our recommendation to retail traders would be to simply stop trading most of the stock options,” said Shubham Agarwal, chief executive officer, Quantsapp, an algorithm analytics firm. “Options market in India for stocks is already hollow if we remove the top 20-30 of them in F&O. There will be multiple complexities with the physical settlement.”

 

[vikas2131]

@vikas2131
All types of dirty plannings are going on to shift F&O volumes to CASH.
SEBI already said,
Sebi to make physical settlement mandatory in phased manner

***********
Sebi said that stocks which are in derivatives segment but do not meet the enhanced criteria will be physically settled and they will exit the segment if they fail to meet the eligibility criteria for three continuous months or a period of one year from the date of the circular.

“If physical settlement of stock options is a reality, our recommendation to retail traders would be to simply stop trading most of the stock options,” said Shubham Agarwal, chief executive officer, Quantsapp, an algorithm analytics firm. “Options market in India for stocks is already hollow if we remove the top 20-30 of them in F&O. There will be multiple complexities with the physical settlement.”

i always maintained that our market is ill-liquid and this offering of stock derivatives by sgx is really gonna hit hard...The volume on sgx nifty was already higher then our nifty and with more product offerings u could expect things to worsen.

Even the litigation path does not offer much hope for nse

https://www.livemint.com/Opinion/uH...-SGXs-Nifty-or-should-we-say-shifty-move.html

Most of the FPI exposure is concentrated in Nifty 50 stocks which contribute a third of the futures turnover on the NSE.If SGX goes ahead with the launch, he said, nearly 50 percent of the FPI turnover is likely to move by the end of the first month.

https://www.bloombergquint.com/mark...-from-nifty-single-stock-futures-in-singapore.

 

[Newbie Day-Trader]

https://www.sebi.gov.in/legal/circu...-for-stocks-in-derivatives-segment_38629.html

SEBI's above said lastest circular about review framework is not directly related to increased lot size.
But, my common sense is that, before increase lot size SEBI needs to eliminate low liquid stocks from the current F&O list also.
Above circular would automatically eliminate many low liquid stocks(some trader friendly stocks included) from the Current F&O list. So, there is absolutely no doubt that, silently SEBI is moving STEP by STEP closure to cut retailers participation in F&O.
Also, this circular came abnormally very fast(within few days) after it was proposed (when this thread was opened). Usually, SEBI takes 6month-12month to make final circular after something is proposed.

Honestly, I don't think it's a bad thing to reduce the number of F&O stocks since that might actually help to consolidate liquidity in the remaining F&O stocks but yeah, everything else is just stupid & authoritarian, including, trying to limit retail participation, whether by increasing lot-sizes or using some income-based restriction. Like I've said, if they genuinely cared to increase volumes in the Cash market with an intention to improve Indian capital markets then they would've proposed to eliminate STT in the Cash market but like you've said, it's all about their greed to extract more STT. As things stand, if they increase lot-size or impose an income-restriction, they will likely meet their objective of reducing retail participation in F&O segment & the volumes & liquidity will fall but it will NOT cause an equivalent rise in volumes & liquidity in the Cash market because the trading-costs are too cumbersome in the Cash market, so people will either stop trading on NSE or they will trade somewhere else, legally or illegally, which won't benefit the country.

i always maintained that our market is ill-liquid and this offering of stock derivatives by sgx is really gonna hit hard...The volume on sgx nifty was already higher then our nifty and with more product offerings u could expect things to worsen.

Even the litigation path does not offer much hope for nse

https://www.livemint.com/Opinion/uH...-SGXs-Nifty-or-should-we-say-shifty-move.html

Most of the FPI exposure is concentrated in Nifty 50 stocks which contribute a third of the futures turnover on the NSE.If SGX goes ahead with the launch, he said, nearly 50 percent of the FPI turnover is likely to move by the end of the first month.

https://www.bloombergquint.com/mark...-from-nifty-single-stock-futures-in-singapore.

More competition is always good. It causes companies to cater more to their customers. So hopefully, this will cause NSE to feed the right people to stop SEBI from killing their golden goose.

 

[Novice30]

Kick out retail from derivatives and then increase timings, nice!

But I am happy with what SGX is doing, SGX showed NSE who's the boss!

SGX keeps its Nifty product and now will not pay any licensing fee also, NSE has become a BIG LOSER.

 

[headstrong007]

SGX had said it would delist all the NSE-licensed contracts and launch trading in new India products, including SGX India futures, SGX India options and SGX India Bank.

Legal experts said SGX’s move did not infringe any rules as these products do not track any benchmark index that is intellectual property of domestic exchanges.

Further, the contracts won’t track the original price movement on the NSE as the settlement price for these will be the average of the final settlement prices of futures contracts traded on the NSE.

“Legal action looks difficult as settlement data is publicly available on the exchange website.
However, since the SGX India contracts will not be tracking the price movement of the underlying security on a real-time basis, these contracts might not become as popular as SGX Nifty,” said Sandeep Parekh, founder, Finsec Law Advisors.

"SGX will launch three derivative products in June: SGX India futures; SGX India options; and SGX India bank futures.
For 29 out of 30 days, these contracts won’t be anchored by any underlying security or index; they will be whatever their buyers and sellers want them to be. However, ONLY on the last Thursday of the month, they will get settled according to the average of publicly available expiry prices of futures and options on Nifty 50 (and Bank Nifty) benchmarks on the National Stock Exchange in Mumbai."

Obviously, the chance of popularity of such products is very less comparing to SGX Nifty.

 

[afin]

SGX had said it would delist all the NSE-licensed contracts and launch trading in new India products, including SGX India futures, SGX India options and SGX India Bank.

Legal experts said SGX’s move did not infringe any rules as these products do not track any benchmark index that is intellectual property of domestic exchanges.

Further, the contracts won’t track the original price movement on the NSE as the settlement price for these will be the average of the final settlement prices of futures contracts traded on the NSE.

“Legal action looks difficult as settlement data is publicly available on the exchange website.
However, since the SGX India contracts will not be tracking the price movement of the underlying security on a real-time basis, these contracts might not become as popular as SGX Nifty,” said Sandeep Parekh, founder, Finsec Law Advisors.

"SGX will launch three derivative products in June: SGX India futures; SGX India options; and SGX India bank futures.
For 29 out of 30 days, these contracts won’t be anchored by any underlying security or index; they will be whatever their buyers and sellers want them to be. However, ONLY on the last Thursday of the month, they will get settled according to the average of publicly available expiry prices of futures and options on Nifty 50 (and Bank Nifty) benchmarks on the National Stock Exchange in Mumbai."

Obviously, the chance of popularity of such products is very less comparing to SGX Nifty.

I have a super fundamental question with regard to the SEBI circular..... When is the projected timeline for the new rules to start? Any clue anybody?

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