In other news, in 2024,
- the revenue from the Cigarettes market in India is expected to be over US $16bn
- the revenue from Alcohol consumption is expected to exceed US $55bn .
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When you say that, do you mean primarily losing to Foreign traders? Otherwise the statistic doesnt have the same impact perhaps…
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Whats the correlation between cigarettes and the main topic. Did not understand
I think i got the answer
All 3 have big numbers.
Is every single message of yours going to be from chatgpt?
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Nithin, in a free market - eventually the losing traders will run out of capital and quit trading. Some may suceed, some may go back to the drawing board and return with more experience and become better traders. They eventually learn from paying the market it’s tuition fee.
This how the free markets work - so why is SEBI trying to be an over protective parent?
A light touch regulation would be highly beneficial for the economy, markets and traders.
But let’s also put things into perspective with the ₹85,000 crores. The govt earns ₹25,000 crores through STT alone. Add to that ₹90,000 crores for LTCG and ₹15,000 crores for STCG in AY 2023 - and the numbers speak volumes. That’s just tax.
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I think primarily the issue is that since 90pct of traders are loosing and the top 0.5pct of the sharks are making money those 0.5pct are likely to be foreign hedge funds etc…basically these funds are sucking money out of India. And hence it’s becoming a systemic problem for SEBI / govts point of view…few large domestic large sharks will be making money too but that’s probably not such a big issue as capital likely remains in India diverted back into investments probably. For SEBI to make such a comment implies they have data to see that these large foreign funds must be make ng outsized winnings. Domestically if one traders wins and other looses I don’t think it matters at all at systemic level then.
I personally have a friend trader who works for a dubai based fund which has a subsidiary in India and basically they do straddles with huge sums of money making 30-40pct an year at a capital of approx 1000cr so that’s a lot of money flying out and he must actually be a small fish I guess
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@Bhaskar29 Ban foreign funds then , as simple as that . or ask the foreign funds to give 40 % flat tax . SEBI should stop harassing us every year
Whats the name of the Dubai based firm ? You can DM me if you can’t write the name publicly
Good point. Most likely this could be the case. I saw an interview with SEBI chief who says that SEBi depends on data. This could be one of the reasons.
Are there no restrictions for these foreign firm when they take the money out. An NRI can take out money without any restrictions of investments which are made from NRE funds. Similarly for residents the max is USD 250,000 per year.
Pretty sure there are quite a few FII making outsized returns, and a lot of them manipulate BN imo. Instead of taxes and blanket bans, Sebi should work towards providing a level playing field. Already there are talks to limit exposure of entities in single stocks (thereby preventing derivatives manipulation), hope that is enforced soon.
And like you said, Resident Indians making money (outsized or not) shouldn’t bother Sebi. I invest almost all my earnings from trading into Mutual Funds.
foreign hedge funds should be limited to hedging, covered call, cash secured put on regular exchange. for trading they must be moved to gift city exchange where gift nifty is trading and Indians are not allowed to trade in giftcity aswel. Instead of punishing those hedge funds who does injection they choose to punish innocent locals every time, they did the same with stock options last time and killed its liquidity.
@Joe_Maxpayne : I agree
@VijayNair : I would also think manipulation is quite possibly there - but for us retailers there isnt any way to prove other than anecdotal experience. Only regulator will have a way to prove the same/take any action on the same. For example I have felt for last year (since the multiple expiries were introduced) - big funds are selling calls in the morning big time - and most of the time a jump up in NF/BNF never makes money for options buyers (even with a big jump up) - the market makers/funds mostly kill volatility for most of the day - forcing most option buyers out of the trade. Then in the last hour they introduce huge vol spikes and throw out small retail sellers as well. But then again no way to prove - but I do think this is a lucrative trade for big guys.
@neha1101 : I dont know exact mechanics of setting up the subsidiary - but seems like CA’s have some loop holes for LLC’s etc. to make sense for funds to route money via overseas funds to evade/reduce tax liability.
Generally Indian markets (as well as other markets) are not level playing field for retailers.
I prefer commodities now for trading - as its not easy for large funds to deploy large sums easily as well as global factors moving prices rather than ease of manipulation for large funds
My views/experience only - dont quote me on it. Decide on your own risk assessment
I think whatever be the comments , drama from SEBi &its chief is just to hide or to protect Algo traders , Allgo trading is the real issue ,Sebi is just pretending to protect the Retails traders , Nobody knows what happens to the Investor protection fund money.
Well regulator might have data which we don’t, so difficult to get the exact thinking of regulator.
One aspect could be, Lot of people are taking out personal loan / other unsecured credit and using that money to invest in F&O. So in a way at some point Trader’s loss could result in a systematic risk in banking sector.
Beside remember, small guys will always come crying when they loose money and blame it on govt. Recently in WazirX hack case people who have lost are already crying complaining that govt was sleeping, in spite of govt making it very clear that Crypto is not kosher.
So i think regulators are just covering these possibilities in advance.
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Some much needed sensible inputs on the whole matter:
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My prediction of Budget (July 2024) Announcement regarding Capital Gains Taxation :
1.) LTCG Tax : 20% tax with indexation*
2.) STCG Tax : As per Tax Slabs*
This government is hell bent on just increasing taxes any how. The ‘Minister’ is dumb and clueless. The brain behind such poor policies are power hungry ‘Elite’ bureaucrats in the finance ministry. (They have a single policy of imposing maximum taxes wherever the money is flowing in the economy)
- If not in tomorrow budget, then very soon in the near future.
@nithin Do you agree that this is the way of thinking in the government about taxation or your views ?
This isn’t unfair i would say - atleast for higher income guys and in comparison to how others get taxed. CG will still be lenient as its only 20% + indexation benefit on top of that vs 30+ and CG only gets charge when we book which can be a major advantage vs every year for slab income.
Perhaps some concession for lower bracket people could be added if 1L is not enough.
In the long run, ill probably make most money from CG hopefully, so it would be negative for me too. But i dont think this is unfair.
In that case STT removal is a must.
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I think these guys have all gone stupid at once. Can someone inform them that you can’t ban speculation if you want a market to exist.
In USA they have soybean future, corn futures etc. A farmer can hedge his bets. But who takes the other side of the bet? Speculators of course. If you only allow farmers to trade corn futures, the liquidity will dry up within a day.
A market can’t survive without speculators. Even in stocks, the speculators provide essential liquidity to the actual long term buyers and sellers.
All our government officials with half baked info have lost their collective minds and seem to be hell bent on messing up a thriving ecosystem.
@nithin
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