Day traders get sleepless nights

Day traders get sleepless nights

Day traders get sleepless nights

By Nazia Vasi/TNN

Mumbai: When P Chidambaram dropped his budget bombshella 0.15% transaction tax on players in the stock marketone community in particular hit the panic button. Day traders, that motley bunch which makes a living out of buying and selling stocks within a single day, began to wonder if the party was over. Theres no way I can survive in the market if this tax stays, says Viren Solanki, a father of two. My livelihood will be wiped out.
Thanks to the FM, an arcane term has suddenly hit the public consciousness (day-trader, whats that?). In a nutshell: the day trader sits glued to a computer\television screen, obsessively following the drunken surges and dips of the market, and squeezing a few rupees or even paise out of each one. A day trader could be a student, a housewife, a professional or anything else, but s\he is first and foremost a gambler. And this collective gambling, day traders like to claim, accounts for 80% of the
volumes on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Day trading is a profession I got into a long time ago, reminisces Dr Pankaj Joshi, an anaesthetist. Entering the market at the tender age of 18, Joshi is now a veteran of the game and leads a schizophrenic existenceanaesthetist early in the morning and trader for the rest of the day. I started trading for the sheer love of profit, and the market nurtures my gambling instinct, he says.
Vivek Doshi, another day-trader, learnt the tricks of the trade on his first job as an accountant at a brokerage house. I got into day trading after the Ketan Parekh scam sunk the markets four years ago, he says.
There were few opportunities for long-term investors, and day trading emerged as the need of the hour. Today, it gives him returns almost every day, and he is quite happy. Incidentally, traders are only willing to let on that they earn a few thousands on every croretry to pin them down on the profits they make, and they clam up.

If PC sticks to guns, many day traders may call it a day


Mumbai: Finance minister P Chidambarams decision on a 0.15% transaction tax on players in the stock market has left the daytrading community shellshocked. Most people in the profession have been in it for a long time and get returns almost everyday.
While some day traders operate their own accounts online, many converge on their brokers offices. Milind Sethna, a professional arbitrator for the last four years, sits in a small room in his brokers office, with 25 friends and several computer and television screens from 9.30 a.m. when the market opens to 3:30 in the afternoon. Solanki, also an arbitrator, uses his brokers office too but operates slightly differentlyhe has formed a corpus with two of his friends and they work jointly, splitting profits as well as their losses. Like many other traders, they trade in one company only for a whole month. If I trade in TISCO, I will trade in TISCO for the entire month, unless I know Ill definitely lose money on it, says Solanki. This
way, were certain to make some money at least.
A love for gambling may be the glue that binds the day-trading community, but day trading isnt a brainless matka bazaar (indeed, many day traders would be seriously offended by the idea). Day traders really study the market as well as Indian and global current affairs that could affect markets, says stockbroker Sanjay Zaveri. After a competitive day at punting, many of them watch the international news, read the papers, and study the market keenly for at least five hours.
This happy community might just disintegrate, or at least seriously shrink, if the FM does not do a rethink on transaction tax. While most day traders threaten to get out of the market completely, some are looking for alternative routes. The BSE is meeting the government on Tuesday, says trader Deepa Kanasia. Were hopeful they will come to an agreement and at least lower the percentage of tax if not scrap it altogether. If they dont, Ill look at the short-term investment route.