SEBI's new move to cut retailers participation in F&O!

[prakaash.22282]

Coming Soon....

Is it including commodity segment??

 

[Riskyman]

Is there any official information from SEBI website about net worth certificate requirement for trading in Cash and derivative markets?

Imo, I dont see SEBI tinkering with the cash markets. Their grouse is only to do with unwanted risky speculation in the F&O markets by small timers.
If they impose the networth thing then it would imply that every person in this country who has a demat account has to comply. There are huge compliance issues with this. Broking houses will find it tough and their costs will go up. We can expect opposition from all quarters if SEBI tries to impose this.
The number of People who trade in F&O are comparatively smaller. So, enforcing net worth via brokers maybe possible. I think SEBI will satisfy itself by simply increasing the margins.

 

[Aman1]

what is the line of demarcation b/w small traders and big traders by the way?

 

[Riskyman]

what is the line of demarcation b/w small traders and big traders by the way?

A recent letter to SEBI by ANMI suggested that people with 25 Lacs plus be classified at HNI and below that as retail.

 

[MaxX]

Can take a look at this for more information on the increased margins..

https://twitter.com/i/web/status/1036509004455759873

Also they have said that when margins were increased in stocks in the past, the premiums for the options did go up.. so can expect the same now.

 

[Riskyman]

Why should premium increase/decrease?

Option premiums don't depend on margins required to trade futures / equity

Implied volatility is one of the key factors that determine how options are priced. IVs are probabilistic in nature.
Lets assume that liquidity reduces due to this SEBI move. This could lead to large spreads and wild price movements.
Large price movements = High IVs.
Higher IVs = expensive premiums.

Just another way of looking at it.....

 

[cinderblock]

There has hardly been any change in long term VIX while the futures lot size changed from 25 to 50 then 75 in the last 4 years.

Even the person in the video says according to their research VIX may increase about 1%. How much do you expect option premiums to increase for a percentage increase in VIX? Specifically, what is the range of option Vega?

 

[kingsmasher1]

Got this email from Sharekhan today, haven't received it from any other broker yet. Thankfully haven't mentioned anything about margin correlation with net-worth/total income.

 

[trader2017]

its getting clearer now..this thing is mainly going to hit f&o traders

 

[qu@nt]

https://www.bloombergquint.com/mark...ign-outflows-after-sebis-new-rules#gs.w=yMwhw