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

[Novice30]

So, Zerodha has made its COIN service free.

This seems like some kind of preemptive move by Zerodha to attract/retain active client base which otherwise may get somewhat impacted by any SEBI action.

 

[Novice30]

Very good news, NSE Chief directly come to support the retail investors and traders now.

Recently in an article named

Retail investors and derivative markets

- Vikram Limaye said

Research shows that retail investors don't distort derivative market fundamentals but enhance price efficiency and liquidity.



Now we have powerful support behind - The NSE lobby which will try to prevent hard regulations. NSE obviously don't want to lose their derivative business at least for options market.

https://www.business-standard.com/a...rs-and-derivative-markets-118081900727_1.html

******************

NSE is not bothered about who is making money and who's not. They care only concerned about their market share. They are here to do business and are not well-wishers of anybody including retail.

NSE is yet to get clean chit in the server co-location case.

In-principle, I agree with SEBI move to limit leverage in markets buy I am against over-regulation and hope that retail does not get kicked out completely from the market.

SEBI should ensure that the retail gets to trade atleast in one lot of futures and is allowed to buy 2 to 5 lots in options. Good traders can make money and will move forward.

 

[afin]

https://m.timesofindia.com/business...-take-on-big-lenders/articleshow/65522454.cms

IDFC partners with Zerodha and the current NSE chief was previously CEO of IDFC

This is nice. If it goes through, I might be temptedto open an account with IDFC

 

[TraderGYO]

Received a notification from my broker - (sigh of relief for options buyers?)
"Termination of Margin Lending from Sep 1, 2018

Dear Client,

Effective September 1, 2018, Interactive Brokers (India) Private Limited will no longer offer margin lending for accounts it carries. Accordingly, you will be required to maintain sufficient cash in your account to pay for all NSE stocks purchases in full. In addition, the margin required for NSE derivative positions (i.e., options and futures contracts) will have to be met with cash.

This change requires repayment of your current INR loan (if applicable) by October 1, 2018. Repayment can be made by depositing funds and/or closing the stock positions securing the loan. Please note that Interactive Brokers (India) Private Limited reserves the right to liquidate positions in your account should you fail to take these steps in a timely manner.

We appreciate your understanding of this policy decision and cooperation with loan repayment (if applicable).

Regards,

Interactive Brokers Client Services "

 

[afin]

Keeping track of all the developments over the past 2 weeks and the intense discussions here, I am thinking that it may be a good assumption that that:

1.) margins and lot sizes would increase
2.) leverage would be provided (probably 2x to 5x depending on multiple variables including net worth), but not in the ranges of 20x to 40x anymore

 

[TraderGYO]

Keeping track of all the developments over the past 2 weeks and the intense discussions here, I am thinking that it may be a good assumption that that:

1.) margins and lot sizes would increase
2.) leverage would be provided (probably 2x to 5x depending on multiple variables including net worth), but not in the ranges of 20x to 40x anymore

We will see, probably options buyers will not be as affected as futures traders.

 

[superman]

Received a notification from my broker - (sigh of relief for options buyers?)
"Termination of Margin Lending from Sep 1, 2018

Dear Client,

Effective September 1, 2018, Interactive Brokers (India) Private Limited will no longer offer margin lending for accounts it carries. Accordingly, you will be required to maintain sufficient cash in your account to pay for all NSE stocks purchases in full. In addition, the margin required for NSE derivative positions (i.e., options and futures contracts) will have to be met with cash.

This change requires repayment of your current INR loan (if applicable) by October 1, 2018. Repayment can be made by depositing funds and/or closing the stock positions securing the loan. Please note that Interactive Brokers (India) Private Limited reserves the right to liquidate positions in your account should you fail to take these steps in a timely manner.

We appreciate your understanding of this policy decision and cooperation with loan repayment (if applicable).

Regards,

Interactive Brokers Client Services "

What is the revise margins for derivatives now ?

And they are not providing margins even for intraday positions ?

 

[Newbie Day-Trader]

Good read, seems all our hustle and bustle is making the right kind of noise and making media see our side of the story.

Unnessary meddling always ends in disaster.
Also if SEBI wants to safeguard uninformed investors from the kind of "24 lakh" losses, a better way would be to stop trading after a predetermined loss in a FY, maybe 2-4 lakh.

Good suggestion. If SEBI really wants to limit losses for retail traders, then the most obvious thing to do is to put restrictions on how much they can lose; there's no reason to restrict F&O trading & leverage unnecessarily. They should deal with the problem (retail losses) directly rather than acting like dictators trying to merely wield their power.

Just thinking about the worst case scenario, if retail traders are cut off from the market, how will it affect the markets and liquidity? I think it will depend upon what percentage of the total present turnover is made up by the retail traders.
If its curtains for us, it will be really very sad, to just throw away whatever we have learned so far, just because of the whims of somebody. I am feeling like a mere puppet. And for those who have given up their day jobs, it will be a nightmare. As of now, just lets wait for the day of the Bombing.

And this is the last nail in the coffin of my love and respect for Modi.

Obviously, SEBI thinks that retail turnover is "too much" at present (I remember seeing a figure of 25% somewhere, though I'm not fully sure), that's the whole point of this whole authoritarian drama; so of course, markets & liquidity might see a significant impact IF there are no loopholes for retail traders to continue trading in F&O.

 

[vikas2131]

https://www.bloombergquint.com/mark...lity-norms-who-will-certify-investor-networth

 

[vikas2131]

https://www.bloombergquint.com/mark...lity-norms-who-will-certify-investor-networth

They wanna use net-worth to stop people from trading in cash markets too..