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

[headstrong007]

I think the physical settlement is only at expiry and not anytime.

Yes, only here not in US which they followed.
Physical settlement rule applied by SEBI IS ONLY PARTIALLY APPLIED NOT EQUIVALENT TO US where the main goal of physical settlement is you can exercise anytime. Here, it is only at expiry bcoz Govt wants only the extra STT, but don't want to give the advantage like US.

That is my main objection, they are mixing the different and different rules only to attract more STT and more cash volumes.
Mixing Europian Black Black Scholes models with US type of Physical Settlement (where the main goal of that Physical Settlement is you can exercise anytime but here it is applied only at expiry).
You can see how the rules are twisted and applied partially to favor the Gormint only.

There is the basic flaw in the idea, of copying US type physical settlement. For physical settlement stock options must be liquid.
US market is well developed and contracts are very liquid, no comparison with India. In India, those 46 stocks F&O are not liquid, not deserve physical settlement at all.
Here only a few stocks options are liquid enough out of about 200s of Future contracts. Traders will ultimately move to few liquid stock futures and index futures. The volume will shift to only selective Stock F&Os and Index Futures. This is very bad for the overall market structure.
SEBI has no idea of the consequences of such mischievous experiment. Let's wait and watch the effect until they implement it to all stocks derivative by phased manner (as they said).

 

[bpr]

I think with physical settlement the end result will be the volume of futures will increase at the cost of option liquidity.

 

[headstrong007]

Finally, SEBI is planning the most dangerous move to cut retailers participation in F&O.

Sebi plans to cap investors’ equity exposure in line with net worth

https://m.economictimes.com/markets...e-with-net-worth/amp_articleshow/65381833.cms

https://www.thehindubusinessline.co...eing-a-nanny-to-investors/article23515378.ece

+++++++++++++++

Let's sign the petition and tell your every freind, relative to sign it, who have a Demat or trading account or investing in any equity-related mutual or balanced funds.
Lets, join the protest quickly before it is too late, it's urgent.

https://www.change.org/p/sebi-again...m_medium=copylink&utm_campaign=share_petition

Let's share the link using social networking.
Previously Sebi changed the STT expiry trap rule after such a petition is hugely popular (signed by many).
We traders are individual, we don't have unions. So they are taking the advantages. Let's fight using social networking. Share the link to every friend using every means, email, whats app, twiter, facebook. everywhere. I am doing so.

 

[headstrong007]

Imp related discussion copied from General Chit Chat thread (as it will be buried soon there with other comments). Pls, don't take it as repeat post.

headstrong007 said:

Sebi & Gormint are jointly performing a planned sequential action!
"the last nail in the coffin" may be

Cap investors’ equity (BOTH CASH, DERIVATIVE) exposure in line with net worth.
Everyone will need to go with a costly process using a CA to ascertain net worth certificate.
Many beginners, newcomers will stop investing/trading directly. I doubt it is an indirect way to shift smart small individual direct investors and traders (mostly common people) to mutual funds!

deba72 said:

This is the policy of this Govt in everything they have done( or not done) so far... i.e shift business from small and unorganized sectors to few organized businesses... and probably we all know why they are doing that...

 

[niftytaurus]

Hi Headstrong Sir
Now no option for retail traders to trade in CRUDE..But as you said before Crude is more difficult to trade than nifty & banknifty index..
I have also seen crude charts..its very difficult to trade crude..
Sebi has decided to monopolistation of capital market for favour of nutual funds & big boy clubs..
After long years of hardwork, retail trader learn to trade equity, now what option trader has left...?? quit trading? or dabba trading?
thanks

 

[headstrong007]

Let's fight the case in Court together when there is no option other than quit trading or dabba trading!

Many small traders are living with leverages. Due to lots of unemployment or low salary, many people are involved in trading over the last few years. Some of them are earning for living too. Due to the small capital in initial days they are hugely depending on leverage.

The above-said petitioner said if required may fight the case in supreme court or high court.
He, created a whats app group in this regard. Here it is,

"In order to enable that we need to communicate with each other, so here's our WhatsApp group -

https://chat.whatsapp.com/8kIzlaQG08s5j9bzsKm6pV

Feel free to join."

[Note moderators can delete above link, it is already inside the petition. I just share that group here bcoz our trading profession is in danger, we need to fight together to protect our profession of trading.]

He said together as a group it will be easy to share the cost of fighting. It's better to connect with him to teach a lesson to SEBI.

Personally, as a pro trader I used very high selectively (increase the position size when there is favorable risk-reward). Those are jackpot trades. Without those occasional jackpots (high leveraged low-risk high trades) trading might be meaningless for me.

So, I am with the above-said petitioner too. We must share some cost to fight the case. Together the cost will be very less.

We must actively support that petitioner.

It is better we share some profit when our profession is in danger. After all, this profession gave us those profits/earnings. So for the sake of our trading profession, lets fight.
We must use some profit now to fight the case together, just like the cost of a stop loss(to prevent bigger loss).

I hope some TJ member are serious to fight the case together. After all, what is the use of such a community, if we can't make the fight together when our back is against the wall?

It's time to fight together to teach SEBI a real lesson that we traders are not helpless.
Most of us who survived in this field (after lots of up and down) have special willpower, we are a fighter.

At least, I am with the petitioner. I will fight together.

 

[niftytaurus]

hi
I have been reading all the opinions..
1)I have already said many time, this move is just throwing retailors outside of markets.
2)
they want that even retail just invest in mutual funds..mutual funds has a big lobby
3) lets think, if we get net worth certificate also, but given exposure is just 50% ..so think, if you get even 1 crore rs net worth certificate, you can take 50 lacs rs exposure..means just 5 lots of bank nifty maximum..Do you think, CA Will provide fake net worth certificate? lets assume, ca can also prepare fake net worth certificate..govt will ask do you have that much amount of money, but you didnt pay any tax on it? & even preparing a fake certificate is fake documentation, which is again a financial crime.
4) even some people can prepare those certificates, & you come to trading..first you can trade just small positions which is not feasible for good income
5) even you are allowed to trade..what kind of market will you trade..imagine the chart...? if not, go & please see the chart of some illquid instruments..you will find its not tradable instrument...would you like to trade this kind of chart? it will invite only losses
6) what I am trying to say is it will be complete disaster for trading as a career..all traders will get unemployed
7) its not good move not only for traders....but it affects markets in a complete form also..market is a free entity..it should run by only demand & supply..by putting restrictions , it will now a free entity
8) where will you invest your surplus money if you are not allowed to trading...obviously in banks & mutual funds, mostly in mutual funds..bank main vo loan dekey aapka paisa looteyngey & mutual fund main bhi direct lootengey..
its will be just monopoly of some big companies on capital market..
those curropt big officials already destroy real estate market for retails ...now their eyes on capital..
if they are worried, why dont they put those limitations on HNI..
its like same I want to do a business, because I am unemployed ..but I need to show that I am rich than only i Can only do business..this is also violation of fundamental right of mine to do any financial activity & commercial activity.
Sebi is giving very ridiculous explanation..that they want to save retail investor..its like saving him from cat & sending him to LIONs den by way of mutual funds..
Its all ridiculous, illogic & sometimes very humorous & but very painful to retail full time investors /traders like us whom livelihood is trading only..I am really thinking about quitting trading....even dabba trading is not feasible, because it also run the prices whcih exchange gives, so how will Wwe trade those randon & illliquid markets in even dabba trading..dabba trading even is more riskier..
RIP to Equity traders
thanks

 

[vikas2131]

hi
I have been reading all the opinions..
1)I have already said many time, this move is just throwing retailors outside of markets.
2)
they want that even retail just invest in mutual funds..mutual funds has a big lobby
3) lets think, if we get net worth certificate also, but given exposure is just 50% ..so think, if you get even 1 crore rs net worth certificate, you can take 50 lacs rs exposure..means just 5 lots of bank nifty maximum..Do you think, CA Will provide fake net worth certificate? lets assume, ca can also prepare fake net worth certificate..govt will ask do you have that much amount of money, but you didnt pay any tax on it? & even preparing a fake certificate is fake documentation, which is again a financial crime.
4) even some people can prepare those certificates, & you come to trading..first you can trade just small positions which is not feasible for good income
5) even you are allowed to trade..what kind of market will you trade..imagine the chart...? if not, go & please see the chart of some illquid instruments..you will find its not tradable instrument...would you like to trade this kind of chart? it will invite only losses
6) what I am trying to say is it will be complete disaster for trading as a career..all traders will get unemployed
7) its not good move not only for traders....but it affects markets in a complete form also..market is a free entity..it should run by only demand & supply..by putting restrictions , it will now a free entity
8) where will you invest your surplus money if you are not allowed to trading...obviously in banks & mutual funds, mostly in mutual funds..bank main vo loan dekey aapka paisa looteyngey & mutual fund main bhi direct lootengey..
its will be just monopoly of some big companies on capital market..
those curropt big officials already destroy real estate market for retails ...now their eyes on capital..
if they are worried, why dont they put those limitations on HNI..
its like same I want to do a business, because I am unemployed ..but I need to show that I am rich than only i Can only do business..this is also violation of fundamental right of mine to do any financial activity & commercial activity.
Sebi is giving very ridiculous explanation..that they want to save retail investor..its like saving him from cat & sending him to LIONs den by way of mutual funds..
Its all ridiculous, illogic & sometimes very humorous & but very painful to retail full time investors /traders like us whom livelihood is trading only..I am really thinking about quitting trading....even dabba trading is not feasible, because it also run the prices whcih exchange gives, so how will Wwe trade those randon & illliquid markets in even dabba trading..dabba trading even is more riskier..
RIP to Equity traders
thanks

no trading in futures only in options...one lot of nifty in options 20k-25k exposure.. that is how we will have to trade so even 5 lakh net worth u can trade some good lots but only in options. futures nopes

 

[headstrong007]

Future traders will try to scalp or small profit trades again and again (with limited exposures) to compensate the earlier big profits with large position sizes. Gormint & SEBI wil get increased tax for high-frequency trades, but the traders will get poorer.
This is also the hidden criteria.

 

[hitesh05]

If this is going to happen then what options traders have to trade in any other market ? will it be applied on MIS/BO and CO orders?