Hey
@stoch_guy,
As we head into the General Elections in April/May 2019, the regulator and NSE have increased the margins required to trade in derivatives. You can get
more details here. Basically, we're preparing for the worst! Just take a look at the PE ratio of Bank Nifty! It's unbelievably high at 54+. During such times, volatility can go up quite a lot as has been seen in previous elections
(See this chart). On 18th May 2009, NIFTY hit an upper circuit 2 times in a single day and ended 20% higher than the previous close
(See this chart). Imagine what could happen to brokers & traders who have exposure to derivatives with high leverage this time around. One cannot withstand volatility with highly leveraged positions. It can do more harm than good.
Secondly, as you rightly pointed out the word on the street is that SEBI wants to gradually reduce leverage in the system. They are slowly taking steps in that direction in my opinion. This is the impression I get when we study their circulars from time to time. As a broker, I strongly suggest that you don't overemphasize leverage! The lure is big but dealing with it is another beast. It's like that Motilal Oswal Ad, Wherein the guys get flung around by the bull.
For more information about the leverage provided by us, please refer to
our Margin Calculators.
Disclaimer: We do provide leverage to stay competitive in the market. We are prudent in risk management and we handle leverage with great care. My post may be biased to support our business practices and I encourage the readers to make informed choices.