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

[afin]

Yes, I wanted to highlight the OPTIONS part only with that selective post, as we are already discussing networth part.

Many option traders have a false impression that they can escape, but that is not the case.
SEBI is not considering only Option premium for exposure but whole turnover including premium +strike.

People need to be told that when this proposed move comes into effect, the days of 20x leverage and all are gone. I don't think the discount brokers willo be allowed to provide that kind of leverage. Or even if they actually did, it will probably be very less. What do you think @headstrong007 ?

 

[headstrong007]

Guys who are full time traders or wanna be full time traders , Read this carefully:

Quit your dream , There is no way on earth small traders can make money after introduction of all proposed ideas by SEBI. Here is the official documentation:


https://www.sebi.gov.in/sebi_data/meetingfiles/apr-2018/1524050694434_1.pdf


Again I am saying, either fight against SEBI or find another job; There is no middle ground now !

I am sure that most of us will quit trading; There is no life here anymore

Thanks for the link. I was searching for that document. See below post.

I am still searching the document link, maybe already posted here before where 'product suitability' was mentioned.
Probably SEBI published that report in April 2018.

Quit trading is not an option. We have to fight.

F&O trading is a business according to Income Tax Law. Why should any entrepreneur, the business person quit the profession and do the job for others? SEBI PAGLA GAYE KYA?

 

[vikas2131]

Smart_trade[/QUOTE]

Thanks for the link. I was searching for that document. See below post.




Quit trading is not an option. We have to fight.

F&O trading is a business according to Income Tax Law. Why should any entrepreneur, the business person quit the profession and do the job for others? SEBI PAGLA GAYE KYA?

What happened in korea will repeat here too... liquidity will go down and trading will shift to sgx which means market will get destroyed...

 

[afin]

Thanks for the link. I was searching for that document. See below post.




Quit trading is not an option. We have to fight.

F&O trading is a business according to Income Tax Law. Why should any entrepreneur, the business person quit the profession and do the job for others? SEBI PAGLA GAYE KYA?

Copy pasting some excerpts from the report:

Comparative analysis of the various jurisdictions indicate that certain jurisdictions have specific provisions for retail investors to qualify
them for trading in derivatives. For instance South Korea has “Qualified Retail Investor” Scheme. To prevent retail investors from
making reckless investments and incurring huge losses in derivatives markets, South Korea has allowed only “qualified” retail investors to
enter derivative market by establishing two stages of entry barriers

First stage
-
Retail investors who have completed prior education program and mock trading; and deposit at least KRW 30 million (i.e. Rs. 17.1 lakh approx.) as initial margin are allowed to trade simply structured futures such as KOSPI200 futures or individual stock futures.

The above is most likely going to be implemented.

 

[vikas2131]

Copy pasting some excerpts from the report:

Comparative analysis of the various jurisdictions indicate that certain jurisdictions have specific provisions for retail investors to qualify
them for trading in derivatives. For instance South Korea has “Qualified Retail Investor” Scheme. To prevent retail investors from
making reckless investments and incurring huge losses in derivatives markets, South Korea has allowed only “qualified” retail investors to
enter derivative market by establishing two stages of entry barriers

First stage
-
Retail investors who have completed prior education program and mock trading; and deposit at least KRW 30 million (i.e. Rs. 17.1 lakh approx.) as initial margin are allowed to trade simply structured futures such as KOSPI200 futures or individual stock futures.

The above is most likely going to be implemented.

what is second stage ?

 

[afin]

what is second stage ?

even worse:

Second stage
-
Retail investors with more than one year trading experience allowed under the 1st stage and KRW 50 million of minimum margin (i.e. Rs 28.5 lakh approx.) will be allowed to trade complicatedly structured futures and options such as VKOSPI200 futures.

 

[vikas2131]

Copy pasting some excerpts from the report:

Comparative analysis of the various jurisdictions indicate that certain jurisdictions have specific provisions for retail investors to qualify
them for trading in derivatives. For instance South Korea has “Qualified Retail Investor” Scheme. To prevent retail investors from
making reckless investments and incurring huge losses in derivatives markets, South Korea has allowed only “qualified” retail investors to
enter derivative market by establishing two stages of entry barriers

First stage
-
Retail investors who have completed prior education program and mock trading; and deposit at least KRW 30 million (i.e. Rs. 17.1 lakh approx.) as initial margin are allowed to trade simply structured futures such as KOSPI200 futures or individual stock futures.

The above is most likely going to be implemented.

Btw it would not be so high bec they have already seen how south Korea market got destroyed . when liquidity goes down, it affects big guys more bec they wont be able to trade big lots .

 

[headstrong007]

People need to be told that when this proposed move comes into effect, the days of 20x leverage and all are gone. I don't think the discount brokers willo be allowed to provide that kind of leverage. Or even if they actually did, it will probably be very less. What do you think @headstrong007 ?

Frankly speaking, I can't think anymore. Such nonsense is disturbing my day trading profession since last few days.
Fortunately, there is the Supreme Court, High Court. Lets SEBI comes with the rule.

Better we concentrate on trading in last 4-5 month of high leveraged trading now, to accumulate maximum profit.
Bad main, Jo bhi hoga dekha jayega.

***************
Kospi faced the problem after such regulation, finally they lifted such restriction. It is historically proved without enough derivative volume market become stagnant.
Here is the 2013 news what happened after such restriction to cut retailers participation in another market.

https://www.ft.com/content/649dd0da-4aaa-11e3-8c4c-00144feabdc0

 

[afin]

Btw it would not be so high bec they have already how south Korea market got destroyed . when liquidity goes down, it affects big guys more bec they wont be able to trade big lots .

I am unsure about everything thats happening. It seems that SEBI is hell bent on retailers just making some 2000 rs a day in derivatives. Thats peanuts.

i ll explain. Crude oil big lot is 100 and at 4590 rs = 100 x 4590 it is 4,59,000 rs per contract. Even if we make 10 rs on that each day per day and assuming we have about 19 trading days in a month, that is 19x 10x 100 = 19,000 in an entire month. This is just balls!

 

[vijkris]

Frankly speaking, I can't think anymore. Such nonsense is disturbing my day trading profession since last few days.
Fortunately, there is the Supreme Court, High Court. Lets SEBI comes with the rule.

Better we concentrate on trading in last 4-5 month of high leveraged trading now, to accumulate maximum profit.
Bad main, Jo bhi hoga dekha jayega.

***************
Kospi faced the problem after such regulation, finally they lifted such restriction. It is historically proved without enough derivative volume market become stagnant.
Here is the 2013 news what happened after such restriction to cut retailers participation in another market.

https://www.ft.com/content/649dd0da-4aaa-11e3-8c4c-00144feabdc0

They will implement by the end of this year,
IMO in between Oct and Dec.