SEBI's new move to cut retailers participation in F&O!
- Thread starter headstrong007
- Start date
SEBI's new move to cut retailers participation in F&O might be a 'boomerang' soon if some of the speculators shift to currently best instrument for speculations - 'Bank Nifty Weekly Options'. It'll add up only the more volatility to the market which SEBI dislike. 
Linking ITR type restriction doesn't work for option premiums long side trading which most small retail traders are doing.
Ultimately many retail F&O traders will shift to options from Futures. SEBI can't control retailers mind, they will always find alternate ways. SEBI is just making things complicated, making the market more volatile in the long run.
Let's wait and watch, the ill effects...
Increased volatility is blessings for most Day traders. I am waiting for ill effects- more volatile moves, specially in Bank Nifty.
Linking ITR type restriction doesn't work for option premiums long side trading which most small retail traders are doing.
Ultimately many retail F&O traders will shift to options from Futures. SEBI can't control retailers mind, they will always find alternate ways. SEBI is just making things complicated, making the market more volatile in the long run.
Let's wait and watch, the ill effects...Increased volatility is blessings for most Day traders. I am waiting for ill effects- more volatile moves, specially in Bank Nifty.
Last edited:
Sebi, rethink physical delivery of derivatives
https://blogs.economictimes.indiati...ebi-rethink-physical-delivery-of-derivatives/
https://blogs.economictimes.indiati...ebi-rethink-physical-delivery-of-derivatives/
SEBI & Gormint's only goal is to collect more STT nothing else. Even with current shameless dual taxation system, they want more STT.
Imp, quotes from above article say it all..
"At present, the cash segment amounts to less than 10% of overall equity trading, but garners almost two-thirds of STT collections.
Delivery settlement can well boost securities transactions tax (STT) collections, but which is clearly questionable now that we have long-term capital gains tax on equities.
And mandating delivery settlement for derivatives would mean that the cash market would get more depth as stock lending and borrowing volumes rise."
***********
Ill Effects:-
"The point is that there would be multiple complexities with mandating physical settlement, which anyway is a far more expensive method of reconciliation, and would merely end up moving significant volumes to the derivatives market abroad."
"Compulsory physical delivery of equity derivative contracts would quite needless jack up transaction costs."
But unfortunately SEBI & Gomint's joint goal is to jack up transaction costs, collection more STT. So, no one will care.
**************
Sebi has maintained that the settlement move is designed to curb speculative trading. But, this is manipulation of market, changing the structure of the market in large scale, obviously not possible.
Finally, SEBI will learn the lesson only when such restricted stock F&O volumes shift to other remaining option contracts in a natural way and make the market more volatile.
A market speculator is always a speculator. By imposing various restrictions SEBI can't tame speculation business. Speculators will only find better instruments, like Bank Nifty Weekly Options.
And for ill effects of such move, even if 10-20% of future volumes move to options then it will add up significant volatility in the market. As most of small traders trading options using premium only.
SEBI is daydreaming - want to curb speculative trading, they can't change traders mindset by imposing restrictions.
BANK NIFTY is getting more volatile day by day as more and more traders are shifting to BNF & Bank Nifty Weekly Options from other F&O. Most of the speculators enjoyed today's move in Bank Nifty. Bravo SEBI, make the market more volatile.
Imp, quotes from above article say it all..
"At present, the cash segment amounts to less than 10% of overall equity trading, but garners almost two-thirds of STT collections.
Delivery settlement can well boost securities transactions tax (STT) collections, but which is clearly questionable now that we have long-term capital gains tax on equities.
And mandating delivery settlement for derivatives would mean that the cash market would get more depth as stock lending and borrowing volumes rise."
***********
Ill Effects:-
"The point is that there would be multiple complexities with mandating physical settlement, which anyway is a far more expensive method of reconciliation, and would merely end up moving significant volumes to the derivatives market abroad."
"Compulsory physical delivery of equity derivative contracts would quite needless jack up transaction costs."
But unfortunately SEBI & Gomint's joint goal is to jack up transaction costs, collection more STT. So, no one will care.
**************
Sebi has maintained that the settlement move is designed to curb speculative trading. But, this is manipulation of market, changing the structure of the market in large scale, obviously not possible.
Finally, SEBI will learn the lesson only when such restricted stock F&O volumes shift to other remaining option contracts in a natural way and make the market more volatile.
A market speculator is always a speculator. By imposing various restrictions SEBI can't tame speculation business. Speculators will only find better instruments, like Bank Nifty Weekly Options.
And for ill effects of such move, even if 10-20% of future volumes move to options then it will add up significant volatility in the market. As most of small traders trading options using premium only.
SEBI is daydreaming - want to curb speculative trading, they can't change traders mindset by imposing restrictions.
BANK NIFTY is getting more volatile day by day as more and more traders are shifting to BNF & Bank Nifty Weekly Options from other F&O. Most of the speculators enjoyed today's move in Bank Nifty. Bravo SEBI, make the market more volatile.
Last edited:
SEBI & Gormint's only goal is to collect more STT nothing else. Even with current shameless dual taxation system, they want more STT.
Imp, quotes from above article say it all..
"At present, the cash segment amounts to less than 10% of overall equity trading, but garners almost two-thirds of STT collections.
Delivery settlement can well boost securities transactions tax (STT) collections, but which is clearly questionable now that we have long-term capital gains tax on equities.
And mandating delivery settlement for derivatives would mean that the cash market would get more depth as stock lending and borrowing volumes rise."
***********
Ill Effects:-
"The point is that there would be multiple complexities with mandating physical settlement, which anyway is a far more expensive method of reconciliation, and would merely end up moving significant volumes to the derivatives market abroad."
"Compulsory physical delivery of equity derivative contracts would quite needless jack up transaction costs."
But unfortunately SEBI & Gomint's joint goal is to jack up transaction costs, collection more STT. So, no one will care.
**************
Sebi has maintained that the settlement move is designed to curb speculative trading. But, this is manipulation of market, changing the structure of the market in large scale, obviously not possible.
Finally, SEBI will learn the lesson only when such restricted stock F&O volumes shift to other remaining option contracts in a natural way and make the market more volatile.
A market speculator is always a speculator. By imposing various restrictions SEBI can't tame speculation business. Speculators will only find better instruments, like Bank Nifty Weekly Options.
And for ill effects of such move, even if 10-20% of future volumes move to options then it will add up significant volatility in the market. As most of small traders trading options using premium only.
SEBI is daydreaming - want to curb speculative trading, they can't change traders mindset by imposing restrictions.
BANK NIFTY is getting more volatile day by day as more and more traders are shifting to BNF & Bank Nifty Weekly Options from other F&O. Most of the speculators enjoyed today's move in Bank Nifty. Bravo SEBI, make the market more volatile.
Imp, quotes from above article say it all..
"At present, the cash segment amounts to less than 10% of overall equity trading, but garners almost two-thirds of STT collections.
Delivery settlement can well boost securities transactions tax (STT) collections, but which is clearly questionable now that we have long-term capital gains tax on equities.
And mandating delivery settlement for derivatives would mean that the cash market would get more depth as stock lending and borrowing volumes rise."
***********
Ill Effects:-
"The point is that there would be multiple complexities with mandating physical settlement, which anyway is a far more expensive method of reconciliation, and would merely end up moving significant volumes to the derivatives market abroad."
"Compulsory physical delivery of equity derivative contracts would quite needless jack up transaction costs."
But unfortunately SEBI & Gomint's joint goal is to jack up transaction costs, collection more STT. So, no one will care.
**************
Sebi has maintained that the settlement move is designed to curb speculative trading. But, this is manipulation of market, changing the structure of the market in large scale, obviously not possible.
Finally, SEBI will learn the lesson only when such restricted stock F&O volumes shift to other remaining option contracts in a natural way and make the market more volatile.
A market speculator is always a speculator. By imposing various restrictions SEBI can't tame speculation business. Speculators will only find better instruments, like Bank Nifty Weekly Options.
And for ill effects of such move, even if 10-20% of future volumes move to options then it will add up significant volatility in the market. As most of small traders trading options using premium only.
SEBI is daydreaming - want to curb speculative trading, they can't change traders mindset by imposing restrictions.
BANK NIFTY is getting more volatile day by day as more and more traders are shifting to BNF & Bank Nifty Weekly Options from other F&O. Most of the speculators enjoyed today's move in Bank Nifty. Bravo SEBI, make the market more volatile.
They will understand when liquidity in market dries up and i doubt volume will rise in cash market at all...F&O is meant for hedging and trading. If one tires to blur the line between two , negative consequences will follow.
I thought about this long and hard for many months but I believe that retail clients like us can not move a market like banknifty even by a point unless the market maker on the opposite side wants to take that trade. Volatility can not be a product of retail participation, it is always the market makers. Imagine market makers'/institutions' capability of entering and exiting trades multiple times in a second! We, retailers, almost always buy or sell from or to market makers/institutions , if the volatility changes, that is my mind , a product of group of institutions making it happen.
Last edited:
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