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

[Just-Trade]

I think the sebi rule which would try to link the exposure limit to their ITR could be challenged in high court/supreme count, as it is very against the basic financial freedom of a person. I dont think such draconian rules are present in any parts of the world.
Second thing, lot size in US like E mini are not that much big. 1 emini lot can be taken intraday at a margin of just $500(₹32000). As per per capita income of US, this margin is quite less. So, their lot size is quite justifiable. But, in India, per capita income is quite less, the lot size should not be kept exorbitantly high.

 

[Just-Trade]

I think to increase the lot size n thereby the margin amount is like a social n economical discrimination against the very common people of India, as per capita income is hardly 1 lakh/year.

 

[iwillwin]

may be they will say .. plant more trees.

but paper is biodegradble and plastic isnt

Politicians owning paper Mills, sugar Mills in Maharashtra

 

[okabira]

..............My father generation used to invest in FD & real estate & very little exposure to share market..Real estate was a good investment in their time due to low cost & safety of investment ( they used to invest in land & that time Lan maafia was not so influential)
But right now in my genaeration, what all options...options are many but how much are really protect my capital..every industry has so much corrupt lets take one by one........................so now we medium class left STOCK MARKET...

Politicians owning paper Mills, sugar Mills in Maharashtra

its clr this gormint is selfish .. they literally have 0 interest ..
NT ji said very true..
iwillwin ji pointed it out good.

talking about bullet train ... you will see ..there would be some lafda here too ..

something related to land acquisition for rail expansion ... farmers protesting .. compensating and ullu banaving them ...
then there would be some new tax ... which would be paid by us ....
this gormint thinks that they are getting free loan from japan of 88k crores .. thats one thing... but another 88k crores should be sucked from public also ..
mudi will come somthing like ... [ " ... hone chaheye ki nahi hona chaheye.. ] .. yeh lo 10% India on fast track CESS..
just wait ..
we will pay more.. get nothing

 

[TraderGYO]

i feel this is beginning of many steps that will come. I expect minimum account and maximum no of position limit to eventually come too and if that also fails then it is going to be some Nse certificate that will have to passed to be deal in derivatives

Bet that exam will see leaked papers, corrupt people on top. Solution for retail trader - give the exam again and possibly again,

 

[TraderGYO]

Hi
I have been reading Sebi's previous decisions & latest decision ..Its completelly unfortunate to retail traders
Guys , there is tax benefit but a more important reason is "giving facility to rich & make them help to be more rich " how I will explain
There is a big size of medium class in India..They constitute the biggest part of savings..where they invest their money?
My father generation used to invest in FD & real estate & very little exposure to share market..Real estate was a good investment in their time due to low cost & safety of investment ( they used to invest in land & that time Lan maafia was not so influential)
But right now in my genaeration, what all options...options are many but how much are really protect my capital..every industry has so much corrupt lets take one by one..

Fixed Deposit- It was a safest instrument 10 -20 years back..but now, its giving just 6-7 % return ..with inflation , its a negative return, but still our parents to keep their money their...but its ok till 2-3 years back..but now see the condition of banks & govt new rule regarding deposits ( propesed but very bad..where we will give shares of banks in return of our FDs_) seeing the condition of banks..all banking system can be failed in coming times..our money is not safe in banks
2) real estate-- so costly for medium class but unhonest builder & so many cases like campa cola building , even real estate can be zero in no time
3) gold--no longer attractive , as this also can be turned bear


so now we medium class left STOCK MARKET...so money is turning to stock market..but we need to see its individual entities..

participants are
big DII & FII
retail traders..
THESE 2 PARTICIPANTS...IN 2008, many investors( not intraday traders or swing traders but pure investors burn their hand..& when retail know about f& o..THEY GET INTRESTED BECAUSE NOW THEY CAN ALSO BENEFIT FROM BEARISH MARKET..till then they are not much aware about it..they only buy & FII & DII sell & retails doomed everytime..
so now traders participate in all opportunities ..bearish & bullish..they trade in options & futures & participate in falling market..
My opinion is all mutual fund companies form a lobby & influence on finance ministry & Sebi to stop retail to participate..trust me GOVT motive is not to protect retail or increasing Tax income..increasing tax income is nothing compare to Bribe giving by All mutual fund lobby to influence decsions..this will not look like SCAM ..but mutual fund influence sebi decisions..in the time of no integrity & personal gains, Do you really think , Govt ONLY MOTIVE TO ATTRACT tax ..No , its not..
Imagine, how much money those mutual funds have..managers are earning good fees whethere we loss or gain..mutual fund has so much capital & income from our money..they can give bribe of 10000 times more than STT taxes...imagine the money all mutual funds have ..even 1000 crore of bribe is nothing for them collectively ..even each of mutual fund give a small contribution to make this lobby against retail investors..

so now questions is why are they lobbying to cut retail investors..simple! to gain more capital in their Mutual funds..how? thats also simple..
lets assume..a average retail investor trade with 1 lac rs capital in f& o...its not coming in mutual funds..think! if you have 1 lac rs surplus income ..you dont want to keep it in bank fds or mutual fund..you want to trade in f& o..now if you are restricted doing f& o trading?
what options do you have?
1)you invest it in deliviery stocks--there mutual fund will loot you by make falling market ..like 2008..they will sell & market will fall..even your strong fundamental shares will fall..you will lose..retail lose is their profit..
2) you will go & keep it in bank FDS--because you want to protect it at least though its not growing but capital is safe----there also big banks are giving loans to rich people without colletral ..all npa scams are coming out...bank becomes bankrupt & your deposits are gone--there also thyey are looting you
3) now what options have you left..mutual fund--there your money is bhagwaan bharosa ..if manager is good , its ok..but if they are not..you will loose your capital..as they have disclaimer: mutual funds are subjected to market risk..you just see your money is bleeding year by year..
4) now what options have you left..real estate..there also rich & powerful politicians make them so much inflated & bubble which has no value...but you still want to buy..not a problem..your hard earned money will go by buying some inflated flat from a currept buildre or politician who invested their black money there..but here you dont know on whom land they built...& your money can be zero in no time...you fight legal battle but no use..your money has gone..
so right now ..if they restrict retails traders...where medium class will put their money?
where will I put my money? thats a big question! think India think..its not about Increasing taxes ..its about helping big boys..& YOU KNOW WHO THEY ARE?
Thanks

I can feel your anger and frustration. You have summed up beautifully.

 

[TraderGYO]

I think the sebi rule which would try to link the exposure limit to their ITR could be challenged in high court/supreme count, as it is very against the basic financial freedom of a person. I dont think such draconian rules are present in any parts of the world.
Second thing, lot size in US like E mini are not that much big. 1 emini lot can be taken intraday at a margin of just $500(₹32000). As per per capita income of US, this margin is quite less. So, their lot size is quite justifiable. But, in India, per capita income is quite less, the lot size should not be kept exorbitantly high.

There is a reason why emini is the most-traded futures contract in the world.

 

[okabira]

what if Sebi doesnt scrap above move but comes up .... that you can take short delivery from now on ?

more than 50% stocks listed on NSE trend downwards ... or sideways ..
could we not make money swinging theses.. ? .. instead of predicting the next multibagger ?
wouldnt short delivery also increase liquidity ??

also on days nifty closing -ve ... theses down stocks fall more due to panic..

nothing happens much to fundamental ones... but these get brutally bruised.
chance to make money here ?

 

[maneverfix]

The average monthly derivatives-to-cash-turnover ratio has BIG FLAWS. SEBI intentionally SKIPPED PREMIUM TURNOVER for options. They added up premium+stikes to calculate virtual turnover!
This ratio derivative:equity -> 15:1, 20:1 etc are virtual. It could be 200:1 one day. If someone buy-sell a weekly option or Rs 5, SEBI calculates turnover on whole Bank Nifty 25,000 to find such absurd ratio 15:1.

Actually derivative turnover has decreased in past few years, as people shifted to options. If we calculate real trading turnover using options premiums only and futures turnover, we will get the actual picture. As people are shifting to options quickly due to high STT, Govt is getting less taxes from F&O. So the F&O trader hunt started.

But if SEBI constantly tries to disturb the F&O traders in that way, then a large number of F&O trader from NSE will shift to MCX after Merger of Shares and Commodity Account (soon). And if we consider single account trading in Equity & Commodity, then our exposure is actually double.

Once the shift to MCX happens, same thing will be repeated there also, mini crude/silver will be discontinued and regular lot sizes will be increased to make it out of reach of retail.

 

[Novice30]

Are the upcoming moves by Sebi targetting only to F&O index or will they be applicable to CDs also?

Just-Trade

Currency derivatives comes under the ambit of RBI and not SEBI.