where is volatility?

M

MaxBombay

Active Member
#1
#1
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. :cool:

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. :eek:

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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P

pasha

Active Member
#3
#3
NSE doesn't care about volatility.
Their equation is
more trading hours = more transactions = more money for them :rofl:
 
M

MaxBombay

Active Member
#4
#4
pasha said:
NSE doesn't care about volatility.
Their equation is
more trading hours = more transactions = more money for them :rofl:
Click to expand...
but this is not the case, more trading hours has reduced transactions by 50% because due to trading hours increase volatility is gone and nobody wants to trade. :mad:
 
M

MaxBombay

Active Member
#5
#5
Early trading hours fail to bring in volumes

http://www.thehindubusinessline.com/2010/04/20/stories/2010042053561000.htm

The extension of trading time by almost one hour since January has not resulted in significant increase in trading volumes on stock exchanges.

The number of trades on the NSE dropped 3.5 per cent to 37.7 crore in the January quarter from 39 crore in the December quarter. On the BSE, volumes fell marginally by 0.7 per cent to 13.6 crore trades from 13.7 crore trades in the previous quarter.

“The increase in trading time has hardly impacted volumes and this does not come as a surprise. Nine in the morning is too early for Indian investors to start trading. It is the time when most people are travelling to work,” said Mr Rakesh Goyal, Senior Vice-President at Bonanza Portfolio.

The number of shares traded during the quarter ended January increased only 1.6 per cent on the BSE to 2,549 crore shares from 2,507 crore shares in the December quarter. On the NSE the number fell 7 per cent to 4,419 crore shares from 4,762 crore shares.
Click to expand...
Mr Motilal Oswal, Chairman and Managing Director at Motilal Oswal Financial Services, said an increase of trading by an hour will not result in a huge change in volumes traded. “Volatility in the markets has reduced to a certain extent because of this. Till January the best time to trade was between 10 a.m. and 10.30 a.m.; and after the extension it is now between 9.30 a.m. and 11.30 a.m.,” he added.

A section of market intermediaries were against the change in timing. In fact, both the BSE and the NSE were competing with each other on deciding the timing. It was after SEBI intervention that the both had agreed to the 9 a.m. opening.

Mr Girish Dev, CEO, Networth Stock Broking, said about 80 per cent of the turnover on the exchanges comes from day traders. “If the majority of the trading is done by speculators the volumes traded will not increase.”

Mr Deven Choksey, Managing Director at KR Choksey, said that the volume has not gone up because not many new investors have entered the market. “The market is run by the same players. And our markets do not have new products to attract new investors to take part in it. Due to this volumes have not picked up despite the extended trading time,” he added.

The price discovery, which was happening on the Singapore stock exchange, has not changed still as that market opens ahead of the Indian markets, said marketmen. “Our markets do not offer the tax benefit available in the Singapore markets. This could be a reason why we have not been able to shift the volumes traded in the Singapore Nifty to the Indian equity markets,” said Mr Choksey.
Click to expand...
 
M

MaxBombay

Active Member
#6
#6
times for brokerage industries are becoming very tough due to reduced volatility. No day trader is able to earn due to lost volatility which has resulted in many day trader gone from market hence reduced turnover for brokerage houses. As per insider information from brokerage industry top executive, more then 10% sub brokers have surrendered their business in last 4 months due to time increase, lost volatility, lack of retail participation and more then 50% sub brokers are still not able to keep up with 9am timing.

Recently I was offered 0.5 paisa brokerage for F&O segment (0.005%) with commitment of rs.2500 per month prepaid brokerage volume. If you don't get this rate that means you are not trading enough or you are not negotiating enough with your broker. Brokerage houses are desperate for retail customers but they are not finding any because nobody is making money through trading in this market except executives at BSE and NSE who decided to increase market timings.

I also wonder, Why traderji community have no opinion or opposition about market timing increase. Is it because ....
1) Here there are no serious traders
2) or you really don't care, if some one mess with your lively hood?
3) or you are too careless about growth of your money
4) or you take trading as gamboling ?
 
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S

savkar

Well-Known Member
#7
#7
Re: Early trading hours fail to bring in volumes

MaxBombay said:
Till January the best time to trade was between 10 a.m. and 10.30 a.m.; and after the extension it is now between 9.30 a.m. and 11.30 a.m.,” he added.
Click to expand...
why should this 'best time to trade' change in such a way ?
How does this affect volatility ?
 
SavantGarde

SavantGarde

Well-Known Member
#8
#8
What Has Extended Trade Time To Do With Volatility

MaxBombay said:
times for brokerage industries are becoming very tough due to reduced volatility. No day trader is able to earn due to lost volatility which has resulted in many day trader gone from market hence reduced turnover for brokerage houses. As per insider information from brokerage industry top executive, more then 10% sub brokers have surrendered their business in last 4 months due to time increase, lost volatility, lack of retail participation and more then 50% sub brokers are still not able to keep up with 9am timing.
Click to expand...
Why Do You Think The Four Points Outlined Are The Only Reason For Not Enough Debate.....
For Relatively Successful Traders Extended / Reduced Trading Time Shouldn't Be An Issue.... And A Successful Trader Can Even Take A Few Short Naps During The Market.... Perhaps If Our Policies Change In The Future...Whereby Everybody From Around The Globe Can Participate......Who Knows Even Stock Exchanges Will Remain Open 24/5... Just Like International Forex

I also wonder, Why traderji community have no opinion or opposition about market timing increase. Is it because ....
1) Here there are no serious traders
2) or you really don't care, if some one mess with your lively hood?
3) or you are too careless about growth of your money
4) or you take trading as gamboling ?
Click to expand...
Happy & Safer Trading

SavantGarde
 
SwingKing

SwingKing

Well-Known Member
#9
#9
MaxBombay,

If you are trying to infer something, then you must have sufficient sample to relate and infer something. What I mean to say is that it is not necessary that trading timing has sucked out volatility (FX markets trade round the clock. Yet it has ample volatility).It could simply be that we are in a low volatility cycle which by the way is absolutely normal for the market. Give it some time before we can actually determine a causal relationship.

Tc.
 
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