Attn: Nithin Kamath Sir, Please reply to this thread (Stock Option to Cumpolsory Delivery of shares, by SEBI)

But sebi shd take retailers concern into its account
It may lead to big losses for small investors

I dont think to tell close positions before expiry, SEBI has called SMAC meeting on monday.

I believe, anyone trading in stock derivatives has to hv lot size equal quantity in demat on OWN or through SLB mechanism BORROW equal quantity into demat before trading. After tht do whatever, nothing matters.

Once SLB mechanism comes into picture, everyone’s Credit worthiness comes into picture. Automatically everyone’s Networth becomes evident!!!:joy:

So any retail trader wants to trade in stock derivatives can show their Networth in kyc :joy::joy: What happens next is left to everyone’s guess!!!

Lets hope my khayali pulav remains khayal only!

Anyway, kudos to Zerodha which is strategically well placed in SLB on time to collect all the Hurricane water🏄

What u mean by net worth in kYC ?

A disaster in making, in guise of reducing risk for retail investors , SEBI is going to take away shine from the Derivative markets, If SEBI has genuine interest let them make FNO 1Lot size fixed to 100 shares.

If this becomes a reality, it would be an awesome for a retail investor. Looking forward to it.

It is too early to say anything, but if I were to guess, it will be most beneficial for retail traders. A small trader can enter and exit derivative contract at will.
Have you seen the last 1 hour spikes in market on expiry day? One of the reasons it is happening could be that big traders continuously short/go long on derivative contracts to move the markets to certain levels. Today they don’t have to worry about covering it back before market close. If this comes through, they would have to or give/take delivery. Many other benefits like this.

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@zerodhaonline @Nithin0dha now short straddle and short strangle will not have that much importance as option put and call sold for straddle or strangle have to buy back… am I right…
Please clarify I am confused…

Firstly, this is still like a discussion paper. There is not guarantee that it will see light of day. If it does, all option strategies will have to be squared off in the market before market closing on expiry. So yeah it might mean a little lesser yield on the trade. Shouldn’t matter much.

You are right , but my view was based on Banning of P-Notes and listing of SGX Nifty in Sinagapore,
Government done the right thing banning P-Notes, but FIIs found alternate route to trade in SGX Nifty
Indian Bourses made a mistake allowing SGX Nifty in Sinagapore, Now , to damage further SEBI is going to change the derivative settlement. In my opinion all the FIIS will shift to SGX Singapore there FIIs have timing advantage also.
I was trading commodity futures on NCDX, making good money, then suddenly Government changed the rules , FIIs left and see the results, and what happened to NCDX. i too left trading in commodities.
To add further here is the link

Thanks… now if you don’t mind i want to ask below… please do not reply if you think so.

While let the strategy expire as it is if it works … broker donot get benefitted because there is no buying transaction.
You have supported considering there will be a square off of this type of strategy…

If earning money was the driving reason behind Zerodha or everything I do personally, hmm… we would be just like another broker :). Btw, there is a brokerage charged on exercised options, so this wouldn’t make any difference to us.
I have been a trader and I know different ways in which derivatives can be misused by people with deep pockets. Anything that can even out the playing field is good for everyone.

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Almost on every exchange in the world stock derivatives (not index) are physically settled. If anything FIIs will like this even more. A lot of them take part in covered calls (writing calls on their holdings). Now they will be able to deliver on the exchange platform itself.

I think it is too early to debate on all of this. Need to see if this is actually put in play, and if yes in what way.

It’s really great that CEO is directly replying and ofcourse immediately…
Thanks again and I hope Zerodha will take and support everything considering retail investors/traders…
Thanks again…:slight_smile:

Thank you for taking my view positively, FIIS are usually long term investors, and covered calls are designed to take interest income like house rent income, if derivatives settled in cash every month FIIs loose interest. i am sensing, fearing with my experiences , over the period of time , what happened to commodity trading in the past , will happen to Stock/Index derivatives, we retail traders/Investors end up buying only either stocks or Mutual funds and total exit from the derivative trading

One more thing… how index options will get settled, if someone hold till expiry… and donot square off. Any idea…

My guess - technology (Online trading, encryption n cryptos) will again bomb govts’ plan for ever higher taxes in the name of regulation.

Traders will move to CFDs on european / singapore markets with help of cryptocurrencies and encrypted trading systems.

Better zerodha moves rarly to tie up with some top class cfd brokers.

Index Futures and Options will remain cash settled and this is where the majority of the activity is anyways. Making physical settlement compulsory is good for stock investors as they may be able to use their existing holdings and hedge their risks by writing options. This was the original purpose of introducing options contracts on stocks, but it has moved on to speculation instead of just hedging.

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One quick question,Margin required to trade an SBI future (lot size 3000) is approximately 1.2lkhs. where as if the same has to be taken as a delivery during the expiry I need to have around 8lkhs (assuming 270*3000).

Trading in EQ or FNO is speculation,but I choose FNO because i get the margin benefit over EQ.

I am a small trader,even though I have a demat probably will never be able to invest this kind of capital.What happens to traders like me? Should we stop trading in FNO then? Will Zerodha give me an option to take the delivery on margin funding?

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You sqoff current month future or option and initiate next month contract before expiry of current month contract.

Hi,
I trade in FNO and pay my taxes, now if the the options instead of getting settled, the trader will get delivery. In this case, how do I show in my tax book?