Day Trading Stocks & Futures
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When and how lockdown will be lifted? A primer
The 21-day coronavirus lockdown has badly hurt India's economy, and now everyone is looking at how the Modi government plans to normalise it after April 14. To strategise an exit plan, Prime Minister's 11 empowered committees, which are headed by the home secretary and continuously seeking feedback and assessments, will meet today and decide the next course of action. The committee comprises officials from railways, civil aviation, pharmaceutical, commerce, health, DEPT officials and representatives from businesses.
Besides, the central government has also sought feedback from states. Last week, Prime Minister Narendra Modi held a meeting with chief ministers via videoconferencing and asked them to submit suggestions -- as per the situation in their respective states -- for a staggered exit after April 14. Here's how the current picture on coronavirus pandemic in India looks like:
SO WHAT'S THE PLAN?
The indication from the government is that there's going to be no blanket lifting of the lockdown and that the country could be headed for a staggered exit, the final plan for which is yet to be drawn. A senior minister told India Today that the Centre was planning a "rational lockdown", a micro-managed exit in a staggered manner.
A major reason for this is the government's belief that lockdown has proved to be effective in curbing community spreading. But opening the economy was the need of the hour for the lockdown had already caused irreparable damage to the economy.
IS ANOTHER LOCKDOWN VIABLE OPTION?
India's daily GDP stands at $8 billion. The 21-day lockdown will cause around $168 billion loss and 30-day lockdown around $250 billion. At this juncture, the government might not be in a position to extend the ban as another lockdown could push the economy beyond recovery, a senior bureaucrat said. However, the process of lifting the lockdown could be slow as states are working on different strategies. Reports from the states are expected to reach the Prime Minister's Office this week.
DIFFERENT STATES, DIFFERENT PLANS
Some states like Punjab, Haryana and UP have started harvesting wheat and other crops. These states are planning to announce major relaxations for labourers. Moreover, states are staring at huge financial losses which will impact various state-level welfare schemes. A longer lockdown means extra burden, which will force them to knock at the Centre's door for financial aid.
Reports suggest areas with high coronavirus cases may stay under lockdown, while those with no cases may see relaxation.
ROAD, AIR, SEA TRANSPORT MAJOR HURDLES
Among all the hurdles, road, railways, air and sea transports are the biggest challenges. States are still not in favour of interstate movement. This implies bus transport is unlikely to open up , neither railways which needs states' consent. Private transport may also stay under curbs until the situation normalises.
WILL AIRLINES RESUME OPERATIONS?
The decision on resuming airline operations will be a difficult one for the government. Air India has already stopped booking till April 30, while other airlines are awaiting the Centre's response.
INDIA INC FACING LOSSES
The biggest worry among all is privately-run large industrial units, which employ crores. The lockdown is hurting their balance sheets and will subsequently destroy their financial sustainability. Prime Minister Narendra Modi, during the meeting with all the stakeholders, could chalk out an exit strategy for the industry as well.
https://www.businesstoday.in/curren...own-will-be-lifted-a-primer/story/400360.html
The 21-day coronavirus lockdown has badly hurt India's economy, and now everyone is looking at how the Modi government plans to normalise it after April 14. To strategise an exit plan, Prime Minister's 11 empowered committees, which are headed by the home secretary and continuously seeking feedback and assessments, will meet today and decide the next course of action. The committee comprises officials from railways, civil aviation, pharmaceutical, commerce, health, DEPT officials and representatives from businesses.
Besides, the central government has also sought feedback from states. Last week, Prime Minister Narendra Modi held a meeting with chief ministers via videoconferencing and asked them to submit suggestions -- as per the situation in their respective states -- for a staggered exit after April 14. Here's how the current picture on coronavirus pandemic in India looks like:
SO WHAT'S THE PLAN?
The indication from the government is that there's going to be no blanket lifting of the lockdown and that the country could be headed for a staggered exit, the final plan for which is yet to be drawn. A senior minister told India Today that the Centre was planning a "rational lockdown", a micro-managed exit in a staggered manner.
A major reason for this is the government's belief that lockdown has proved to be effective in curbing community spreading. But opening the economy was the need of the hour for the lockdown had already caused irreparable damage to the economy.
IS ANOTHER LOCKDOWN VIABLE OPTION?
India's daily GDP stands at $8 billion. The 21-day lockdown will cause around $168 billion loss and 30-day lockdown around $250 billion. At this juncture, the government might not be in a position to extend the ban as another lockdown could push the economy beyond recovery, a senior bureaucrat said. However, the process of lifting the lockdown could be slow as states are working on different strategies. Reports from the states are expected to reach the Prime Minister's Office this week.
DIFFERENT STATES, DIFFERENT PLANS
Some states like Punjab, Haryana and UP have started harvesting wheat and other crops. These states are planning to announce major relaxations for labourers. Moreover, states are staring at huge financial losses which will impact various state-level welfare schemes. A longer lockdown means extra burden, which will force them to knock at the Centre's door for financial aid.
Reports suggest areas with high coronavirus cases may stay under lockdown, while those with no cases may see relaxation.
ROAD, AIR, SEA TRANSPORT MAJOR HURDLES
Among all the hurdles, road, railways, air and sea transports are the biggest challenges. States are still not in favour of interstate movement. This implies bus transport is unlikely to open up , neither railways which needs states' consent. Private transport may also stay under curbs until the situation normalises.
WILL AIRLINES RESUME OPERATIONS?
The decision on resuming airline operations will be a difficult one for the government. Air India has already stopped booking till April 30, while other airlines are awaiting the Centre's response.
INDIA INC FACING LOSSES
The biggest worry among all is privately-run large industrial units, which employ crores. The lockdown is hurting their balance sheets and will subsequently destroy their financial sustainability. Prime Minister Narendra Modi, during the meeting with all the stakeholders, could chalk out an exit strategy for the industry as well.
https://www.businesstoday.in/curren...own-will-be-lifted-a-primer/story/400360.html
I think Circuit is only on index spot and trading will be halted as per time of circuit & percentage of move.
There are no circuits on derivatives. You may refer to the "Price bands section" in the link shared by TR bhai.
These halts which you saw are due to price bands in f&o symbols. These bands are dynamic and trading will resume if the prices are in sync with underlying( meaning, no manipulations, huge erroneous orders or algo errors etc. ). But if these f&0 prices are not in tandem with underlying, then trading in that particular symbol will not resume.
Used to see price bands hit very frequently in options trading ( 20% bands) and I remember sometimes on stock futures also ( 10%) . But generally we don't get to see on index futures like today.
There are no circuits on derivatives. You may refer to the "Price bands section" in the link shared by TR bhai.
These halts which you saw are due to price bands in f&o symbols. These bands are dynamic and trading will resume if the prices are in sync with underlying( meaning, no manipulations, huge erroneous orders or algo errors etc. ). But if these f&0 prices are not in tandem with underlying, then trading in that particular symbol will not resume.
Used to see price bands hit very frequently in options trading ( 20% bands) and I remember sometimes on stock futures also ( 10%) . But generally we don't get to see on index futures like today.
Market speculation dips as Sebi's restrictions come into effect
The average daily exchange turnover in derivatives, or F&O segment in the market, has halved since changed rules on enhanced margins and curbs on short-selling took effect
Mumbai: Steps taken by market regulator Securities and Exchange Board of India (Sebi) to curb volatility have succeeded in reducing speculative trades, according to data analysed by Mint.
The average daily exchange turnover in derivatives, or futures & options (F&O) segment in the market, has halved since changed rules on enhanced margins and curbs on short-selling took effect.
The average daily exchange turnover in derivatives contracts hovered above 12 lakh on non-expiry days. This has come down to about 4-6 lakh on non-expiry days after the curbs were imposed. This indicates that despite extreme volatility in the broader indices, speculative trades have seen a marked dip.
Expiry day is the future date by when a derivative contract has to be fulfilled, either by taking delivery or rolling over the position.
On expiry days, before the new rules took effect, the exchange turnover was as high as 37 lakh. Post the curbs, the exchange turnover on expiry days peaked to only 14.5 lakhi
In fact, the number of derivative contracts during March decluned by 19%. This was not just due to the Sebi measures but also because of the extreme volatility which had caused losses to option sellers. Traders also opted for physical delivery, suggesting most of the trades were genuine.
The market regulator had on 20 March unveiled a series of measures to curb extreme volatility being witnessed in Indian markets. Sebi had prescribed enhanced margins for highly volatile stocks and reduced market-wide position limits for volatile scrips. It had also curbed short selling by ensuring that in positions above ₹500 crore short-selling had to be backed by actual stock.
“The reason for reduced F&O contracts is due to the Sebi curbs. Margins have became very high for volatile stocks. For instance, the margin requirement for Axis Bank, which is witnessing volatility in the range of 10-15%, went up by 25%. While F&O contracts have reduced, the cash market turnover has largely remained the same," said Prakash Gadgani, CEO, 5Paisa.Com, a zero-fee brokerage offering from broking firm IIFL Securities.
Speculation seems contained since 20 March but extreme movements of the broader indices have continued. Indian equities rallied on Tuesday, with the Sensex ending 2,476 points higher at 30,067, its biggest one-day gain in percentage terms in over 10 years. The broader Nifty surged nearly 9% to 8,792.
“Volatility is largely a market function and depends on global cues," said Nilesh Gokral, Chief Operating Officer, Angel Broking.
“But we have definitely seen a marked reduction in the F&O contracts and turnover that signals speculation is on the downturn. Cash market turnover has remained unchanged," he added.
Cash delivery against the trades also increased by about 2% in the five trading sessions after 20 March. On 23 March, the first trading session after Sebi curbs, cash delivery peaked to 54%, the highest in the month of March. The number of derivatives contracts traded in March stood at 39.98 crore versus 49.41 crore in February and 54.41 crore in January.
https://www.livemint.com/market/sto...rictions-come-into-effect-11586264816126.html
The average daily exchange turnover in derivatives, or F&O segment in the market, has halved since changed rules on enhanced margins and curbs on short-selling took effect
Mumbai: Steps taken by market regulator Securities and Exchange Board of India (Sebi) to curb volatility have succeeded in reducing speculative trades, according to data analysed by Mint.
The average daily exchange turnover in derivatives, or futures & options (F&O) segment in the market, has halved since changed rules on enhanced margins and curbs on short-selling took effect.
The average daily exchange turnover in derivatives contracts hovered above 12 lakh on non-expiry days. This has come down to about 4-6 lakh on non-expiry days after the curbs were imposed. This indicates that despite extreme volatility in the broader indices, speculative trades have seen a marked dip.
Expiry day is the future date by when a derivative contract has to be fulfilled, either by taking delivery or rolling over the position.
On expiry days, before the new rules took effect, the exchange turnover was as high as 37 lakh. Post the curbs, the exchange turnover on expiry days peaked to only 14.5 lakhi
In fact, the number of derivative contracts during March decluned by 19%. This was not just due to the Sebi measures but also because of the extreme volatility which had caused losses to option sellers. Traders also opted for physical delivery, suggesting most of the trades were genuine.
The market regulator had on 20 March unveiled a series of measures to curb extreme volatility being witnessed in Indian markets. Sebi had prescribed enhanced margins for highly volatile stocks and reduced market-wide position limits for volatile scrips. It had also curbed short selling by ensuring that in positions above ₹500 crore short-selling had to be backed by actual stock.
“The reason for reduced F&O contracts is due to the Sebi curbs. Margins have became very high for volatile stocks. For instance, the margin requirement for Axis Bank, which is witnessing volatility in the range of 10-15%, went up by 25%. While F&O contracts have reduced, the cash market turnover has largely remained the same," said Prakash Gadgani, CEO, 5Paisa.Com, a zero-fee brokerage offering from broking firm IIFL Securities.
Speculation seems contained since 20 March but extreme movements of the broader indices have continued. Indian equities rallied on Tuesday, with the Sensex ending 2,476 points higher at 30,067, its biggest one-day gain in percentage terms in over 10 years. The broader Nifty surged nearly 9% to 8,792.
“Volatility is largely a market function and depends on global cues," said Nilesh Gokral, Chief Operating Officer, Angel Broking.
“But we have definitely seen a marked reduction in the F&O contracts and turnover that signals speculation is on the downturn. Cash market turnover has remained unchanged," he added.
Cash delivery against the trades also increased by about 2% in the five trading sessions after 20 March. On 23 March, the first trading session after Sebi curbs, cash delivery peaked to 54%, the highest in the month of March. The number of derivatives contracts traded in March stood at 39.98 crore versus 49.41 crore in February and 54.41 crore in January.
https://www.livemint.com/market/sto...rictions-come-into-effect-11586264816126.html
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