Since Jan 01 2010 when exchanges extended trading time for 1 hour I am seeing 10 times less volatility in nifty futures and also very low volatility in other stock futures. For me, it has kind of become almost impossible to trade in nifty futures because all my theory was based on volatility.
Well, BSE AND NSE was expecting SGX nifty volumes but they was seriously wrong. Instead of gaining SGX volume they have actually destroyed nifty future volatility which in turn has resulted in half turnover.
Just take this for example,
On April 07 2010 Nifty futures turn over was Rs.8431 Caror.
On April 08 2009 Nifty futures turn over was Rs.15232 Caror.
On April 07 2008 Nifty futures turn over was Rs.13187 caror.
source
http://www.nseindia.com/archives/fo/mkt/fo080409.doc
http://www.nseindia.com/archives/fo/mkt/fo070410.doc
http://www.nseindia.com/archives/fo/mkt/fo070408.doc
So after 3 years when market capitalization is nearly all time high and after 1 hour increase nobody is interested in trading index futures and yet NSE advertise NIFTY futures as STOCK OF NATION.
Due to 1 hour increase daily average turnover is reduced in futures trading (except 1-2 days having all time high volume) and it has really made nifty traders life miserable.
It seem it was major mistake to increase 1 hour trading time. I am working with brokerage industry and I can tell, all brokerages are screaming for volume but there is none. Most of the retail traders trading in F&O are loosing money or not making much. One of my friend who holds top position in Indiabulls also confirmed that low volatility is hurting brokerage business. My other friend who is sub broker, normally use to have 10-15 retail customers at his office who use to trade in nifty and he said now he hardly see 2-3 people turning up for trading and those too get frustrated and leave and investors are investors, at this moment no smart retail investor is interested in investing in market at 18000 levels which is further effecting cash brokerage.
There are rumors in market about group of institutional traders creating false triggers in nifty futures to trap small traders in trades and then reversing trades in their own favor due to low volatility in market resulting in huge losses for small traders.
Its really not making any sense any more to trade in nifty futures. What do you think about it, its just me or everybody else is having same problems?.
What do you think, when volatility will be back in the market?.
Well, BSE AND NSE was expecting SGX nifty volumes but they was seriously wrong. Instead of gaining SGX volume they have actually destroyed nifty future volatility which in turn has resulted in half turnover.
Just take this for example,
On April 07 2010 Nifty futures turn over was Rs.8431 Caror.
On April 08 2009 Nifty futures turn over was Rs.15232 Caror.
On April 07 2008 Nifty futures turn over was Rs.13187 caror.
source
http://www.nseindia.com/archives/fo/mkt/fo080409.doc
http://www.nseindia.com/archives/fo/mkt/fo070410.doc
http://www.nseindia.com/archives/fo/mkt/fo070408.doc
So after 3 years when market capitalization is nearly all time high and after 1 hour increase nobody is interested in trading index futures and yet NSE advertise NIFTY futures as STOCK OF NATION.
Due to 1 hour increase daily average turnover is reduced in futures trading (except 1-2 days having all time high volume) and it has really made nifty traders life miserable.
It seem it was major mistake to increase 1 hour trading time. I am working with brokerage industry and I can tell, all brokerages are screaming for volume but there is none. Most of the retail traders trading in F&O are loosing money or not making much. One of my friend who holds top position in Indiabulls also confirmed that low volatility is hurting brokerage business. My other friend who is sub broker, normally use to have 10-15 retail customers at his office who use to trade in nifty and he said now he hardly see 2-3 people turning up for trading and those too get frustrated and leave and investors are investors, at this moment no smart retail investor is interested in investing in market at 18000 levels which is further effecting cash brokerage.
There are rumors in market about group of institutional traders creating false triggers in nifty futures to trap small traders in trades and then reversing trades in their own favor due to low volatility in market resulting in huge losses for small traders.
Its really not making any sense any more to trade in nifty futures. What do you think about it, its just me or everybody else is having same problems?.
What do you think, when volatility will be back in the market?.
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