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

[headstrong007]

Brokers must aware SEBI the big difference between notional turnover and premium turnover in Option Contracts.
On that report, SEBI calculated turnover on the notional basis for Options only which is ridiculous.
For calculating Tounvoer in Derivative Segment using Notional Turnover is a completely wrong approach when for all practical purposes from calculating STT to all other taxes only the premium turnover is taken!

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Assume we bought and sold 75 Nifty 10400 calls at Rs 100.
Premium turnover : (75 x 100) + (75 x 100) = Rs 15000
Notional turnover : (75 x (10400 + 100)) + (75 x (10400 + 100) )= Rs 15.75 lakhs

SEBI using above Ridiculous Notional Turnover Method purposely to find ridiculous ratio like below.

It is high time Brokers and traders must protest about Notional Turnover calculation and force SEBI to calculate Turnover using premiums. I have written the point to my personal letter to SEBI, but I am only an individual investor. All brokers especially discount brokers must protest.

 

[headstrong007]

Just see today's Top 20 derivative contract. No 1, BankNifty 25200 CE due to Notional Turnover of 22,86,975 lakh! Whereas actual premium turnover is only 9843 lakh ONLY, it is less than 0.45% of that virtual Notional Turnover. Less than 10,000 lakh was actual traded turnover value, but SEBI is calculating nearly 23 lakh, all virtual amount!

 

[Newbie Day-Trader]

Like someone said, the government thinks that people should be free to vote at 18 years of age (something which affects everyone) but shouldn't be free to decide how they want invest THEIR OWN money (which only affects them, not everyone else), so much for the individual freedom in India. Doesn't sound like freedom to me. I sometimes wonder if the whole point of fighting off the British was for us to have brown tyrants instead of white ones.

Obviously, the government doesn't seem to understand basic economics of supply & demand. If you raise prices or put up barriers to entry, it doesn't necessarily extract more value, it merely reduces the demand &/or gives rise to black-markets. So, if they're raising the entry-barriers for F&O with an intent to extract more STT by causing traders to shift to Cash, then they ought to know that traders will just cut back on trading altogether (if they can't trade F&O, & Cash markets aren't particularly tradeable anyway due to STT & lower liquidity) or trade on the black-markets, like dabba trading.

It seems like India is going backwards on this issue, & instead of facilitating more retail participation in the capital markets, so that everyone has an opportunity to benefit from the India Growth Story.
One of the reasons so many individuals are trading F&O is to minimize their trading-costs & to get better liquidity on larger positions, so if SEBI was TRULY serious about wanting to increase the volumes in Cash market instead of F&O then they'd have recommended the government to abolish STT in the Cash market, & that would've caused a lot of F&O traders to shift to Cash due to increased liquidity & lower trading-costs but NO, they don't actually care about that, they just care about siphoning off more money from the markets, even though they should know that they're unlikely to be very successful as more & more traders might have to move to dabba trading, which will hurt both the traders as well as the financial markets in India.

 

[sanju005ind]

For the past few days NSE website is not showing the Option chain. Wondering if it is a conspiracy against the retail traders.

 

[headstrong007]

Probably few retail traders like me wrote them a letter directly opposing the move to cut the retailers participation. They are taking the revenge.
But in the free world of the Internet, no one cares NSE data except excels users.
Use below alternate OPTION CHAIN: We are smart enough with alternate options in hands. We know how to cut the risk.-
https://www.edelweiss.in/market/option-chain
https://www.bloombergquint.com/markets/option-chain

 

[Pankshri]

SEBI is now thinking of extending derivatives trading time as more than half of its business has gone abroad to price in news flow that comes after market hours. Now they want to offload the domestic retail derivatives participants too - what an irony.

By-the-way the application written by me on NaMo app. has been sent to SEBI (this what the update I have got y'day).

Guys lets put pressure on our brokers too through e-mails, ph calls etc.. Brokers should also take up this matter with sebi after all their business will also be impacted adversely.

 

[TraderGYO]

SEBI has put out new circular titled
Review of Framework for Stocks in Derivatives Segment
https://www.sebi.gov.in/legal/circu...-for-stocks-in-derivatives-segment_38629.html
Those who are interested can check it out.

 

[TraderGYO]

SEBI is now thinking of extending derivatives trading time as more than half of its business has gone abroad to price in news flow that comes after market hours. Now they want to offload the domestic retail derivatives participants too - what an irony.

By-the-way the application written by me on NaMo app. has been sent to SEBI (this what the update I have got y'day).

Guys lets put pressure on our brokers too through e-mails, ph calls etc.. Brokers should also take up this matter with sebi after all their business will also be impacted adversely.

Where did you get this information from?

 

[timepass]

The breakeven would increase, the scalpers would suffer. Imagine the cost of trading 1 lot banknifty would be about 15-20 points, 1 lot nifty about 7-8 points

 

[TraderGYO]

The breakeven would increase, the scalpers would suffer. Imagine the cost of trading 1 lot banknifty would be about 15-20 points, 1 lot nifty about 7-8 points

Why do you think so?