General Trading Chat

Tlahuicole

Well-Known Member
it will increase risk also @ 100 lot size , 20 point SL will require 2000 rs risk
10 SL hit trades will wipe out 20000.
oops so we need to have atleast 2 lakh per lot to accomodate 1% risk per trader money management.

And adds are going to be impossible :D for traders with less than 10 L capital.

Even for a three lot trader, who buys 2 lots first and adds one lot later, minimal pyramiding requires 6 lakh capital.

Hmmmmm......:mad::(
 

LivetoTrade

Well-Known Member
One of the clauses mentions that for Index Derivatives, minimum should be 10, and in multiples of 5; so maybe mini-Nifty !!
 

Tlahuicole

Well-Known Member
all the discount brokerages will bite the dust by this move of sebi... masterstroke by larger broker houses... i myself would think 10 times before buying a derivative contract... as losses will be 4 or 5 times bigger than now...
Even though it is a master stroke by large houses, there is some stupidity, large houses feed on retail traders, big fish feeds on small fish, if the population of small fish goes down, big fish have to fight each other for survival. They will bite their own bullet in few months do not worry ;)
 

Tlahuicole

Well-Known Member
NF volumes will fall for sure .
BNF contract size is already around 5 lakh
So it will be made around 35 for lot size I guess.

I am not sure whether it will affect us that much, not confident either that it won't affect us. Let us wait for our dronacharyar to confirm on this act.
 

futures

Well-Known Member
Its def a big blow for small lots traders...Retail traders / investors will find it difficult to trade in F&O. Lot size of Nifty futures will increase to about 60 as per the SEBI formula (based on the circular). Almost all derivative lot sizes will undergo revision.

If one is used to doing MM based on the number of shares like 1000 NF, the margin req for 1000 Nifty would be the same as before, as the lot size would be increased from 25 to 60.

But, the big question is 'will it affect the liquidity'?...it will affect in the short term(for sure)..only time will tell on the real effect on liquidity. Keep a close watch on the daily volume of the futures you are tracking once the rule kicks in..it will give us an idea...
 
SEBI has issued a circular so now stock exchanges have to comply.

This move will affect the liquidity but it may give more trending moves in the market.We have to gear up to trade in the new environment.

Index derivatives will have lot size in nearest increment of 5 so for Nifty at 8500 it will be 60 Nifty lot size...so traders will have to be prepared for trading 60 nifty min at a time.This move will be bad for new guys who trade in a single lot.

Small traders can now shift to buying of options as it will need lower margins but the profit/loss will be bigger....for min 2 lot traders it wont make much of a difference.Option buyers have to buy only in strong trends and liquidate when the trend goes sideways. Small traders now can see if they can daytrade stocks in cash market where there is no restriction of any lot size.

Discount brokers may be affected initially but traders will get used to trading 60 NF at a time....retail traders will have to trade with more responsibility now.

Smart_trade
 
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Tlahuicole

Well-Known Member
SEBI has issued a circular so now stock exchanges have to comply.

This move will affect the liquidity but it may give more trending moves in the market.We have to gear up to trade in the new environment.

Index derivatives will have lot size in nearest increment of 5 so for Nifty at 8500 it will be 60 Nifty lot size...so traders will have to be prepared for trading 60 nifty min at a time.This move will be bad for new guys who trade in a single lot.

Small traders can now shift to buying of options as it will need lower margins but the profit/loss will be bigger....for min 2 lot traders it wont make much of a difference.Option buyers have to buy only in strong trends and liquidate when the trend goes sideways.

Discount brokers may be affected initially but traders will get used to trading 60 NF at a time....

Smart_trade
ST will it affect intraday trends in any way? It makes sense that trends will be stronger and that is good to hear at this time :D
 

manishchan

Well-Known Member
If NF becomes 60 from current 25, I dont see how it will affect much. We were nyways trading 50 till Nov'14.. so basically back to the square one ;)

We should be thankful to SEBI that they are taking some action to keep derivative trading a serious business and forcing (in a way) retails to participate in this business only if they can afford to risk. Else who knows our market can become like China's too where even a street banana vendor is a trader (one wise person once said that itz a sign of big bubble when your grocery wala is giving you stock tips.... watch the movie "Gafla" based on Harshad Mehta scam)

and this is what was happening in China recently.. there everyone is a trader :D


 
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