This is utter madness. Its like having a random gap up/gap down at the last moment. Intraday traders getting feel of overnight trading.
Today nifty was around 24450 was last 15 minutes. Then spot stopped trading. And then around 3:30 nifty suddenly opens at 24614. And thats it. Thats the settlement price. What kind of stupidity is this!
How can someone trade expiry day options with this madness. There is a huge risk of blow up to retailers as well as brokers. Like there’s a serious possibility of blow up if cas price is 2-3% up or down compared to 3:15 price.
Either roll it back or do not apply it to expiry day options.
@nithin - your thoughts? isnt this a serious risk. please convey to officials
People sitting at sebi have no idea how to implement things. Like how couldn’t they think liquidity will be an issue. There could have been ample ways to figure if there would be liquidity .Now they are trying to meddle pre on session as well. God knows what do they actually want.
This is how it has always been- just because it was slow you weren’t able to see it. CAS just exposed “marking the close” and it should stay!!! Note now there is no magnet effect near round numbers. For once JS is blind too.
If you notice today or even yesterday, non expiry day options didn’t react at all to this 3:30 green candle. 11aug nifty calls actually went down while nifty went 170 point up. The market knows and agrees that this is not a real move which is being reflected in next week options. And that’s because those options have a chance to be traded again tomorrow.
But expiry day options have no such chance. The exchange is forcing the CAS price as settlement price on market participants. And hence expiry day options are forced to the Cas value bcs they have no chance to be corrected tomorrow.
If the Cas price was actually real then from 3:30 to 3:40 non expiry options would move to reflect the Cas price. They ignore it completely. What does that say.
Yes correct. Infact nifty was trading mostly less than the closing price for the whole day and then closing is 24614…very high risk. And I felt like people will do more speculation and gambling now by just buying near to ATM options…and see their luck on a daily basis…which definitely SEBI does not want …
Usually in expiries, if JS sold options, they’d try to bring the price to that specific point so that options mostly expire worthless. In Jason’s words,
So non-volatile or silent expiries tend to have that pinning effect on the index(volatile/explosive expiries mean JS bought options and they will move the index in a one way street).
Instead of begging, they can offer like 50% discount for retail on exchange fees(and maybe broker fees) upto say 500/day for a month to improve liquidity.
