Not So Cool SEBI

Some how this scares me :sweat_smile: :unamused: :disappointed_relieved:

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Time is ripe to introduce pdt rules in india

Well dude if you think trading derivaties F&O is bad for salaried class??home loans , personal loans, credits cards are even worse and more terrible which should never be there them. F&O is relatively safe. Your account goes to 0 not -ve where you pay interest over Interest. Your broker squares off your position when margin comes to 50%.

Now coming to home loans, take a guy earning 60k per month taking a home loan of 50L with 10% down-payment for 15 years. His EMI is 30k which is 50% of his monthly salary. So if in this 10th year if he misses his payment home is gone, down-payment gone, I am not sure how well his loan insurance is going to help him. Plus 30k EMI for 50L means he is under a leverage of 1:16 for next 15 years. Salaried class hooked on credit is far worse than trading on exchange

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No. They can & will blow.
But they have enough income to not go bankrupt.

“look before you leap” - and yes, this sort of education has been going on for a while.
NSE sends emails about possible frauds & zerodha builds gatekeeping to stop retail from buying illiquid stock options, SEBI has been increasing margins (just like you proposed) but none of them could even put a small dent on the retail losses.

“i can ignore them and so can others.” - I used to ignore too. An average person is dumb. half of the population is dumber than that. i could not believe how dumb people can be.
One school mate of mine bought 20,000 shares of a penny stock because it was named after his favorite god. I was flabbergasted. This person should not be allowed anywhere near money let alone stock market.

“nothing stops SEBI from going after bad actors” - Yes, SEBI is toothless. hence the only way to protect innocent retailers is to not let them near derivatives.

“Not really the solution. Income does not mean he knows anything” - I agree. people with 25lpa will still blow accounts. but atleast they have means to recover (if they were earning 25lpa).

“Not everyone makes a salary. I am full time trader” - I am not saying you should be banned. i am saying 90% of people are not like you. they dont know what risk-reward means, they dont have emotional control, they dont know what stoploss is, and they will lose 100% of their money if we let them.

So my question is, for a small group of people like you to benefit, should we sacrifice financial wellness of lot of innocnet people?
If banning retailers result in a small group of people (like PR Sundar) not making their living by trading, i feel thats an acceptable collateral damage for the wellness of society.

“What people need is to have some emotional control and some common sense and basic understanding of the market.”
I have proved that this is impossible to achieve, people rely on their instincts when they enter stock market, I doubt they even have EQ.

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haha

A fool and his money are soon parted. There is nothing innocent about it.
Most people will be sane enough not to lose the house. And that initial experience will lead them to be wiser in future. I have lost money initially too, following other people - looking for ‘multibagger’ ideas in stocks.

Some initial speed breaks are fine, even reasonable restrictions on minimum balance like in US ( that applies to stocks too btw) and perhaps minimum time in market and some minimum no of of trades. Like i said, this should be based on behavioral research/experiences in other countries rather than adhoc ideas from you and me or from SEBI babus. And this really applies only to buying options now as futures has hardly any leverage.

SEBI can act against bad actors too - but nothing can be done for a person who cannot help himself and complete ban on derivatives, equity etc etc wont do shit. There will always be some scheme ( chit funds ? ) where uncontrolled greed will get exploited. At the least we should have some fear in people who do the exploiting, but it seems its off the table.

You really haven’t proven anything. You just say something and then follow it up with hence proved. You ignore some points conveniently, your mind is set. But i am beginning to suspect that you might be trolling. Maybe maybe not, but anyway not worth my time. Good luck to you.

“Promoters also put in money in startups” - Promoter invested money is peanuts compared to money invested by angel investors. Your point of capital requirement is moot. Even if startups succeed, they grew produce actual goods, provide employment (like reliance from your example).
On the other hand, experienced traders (since F&O trading) participate in a zero sum game, take money from other less prepared traders, doesn’t produce anything useful at the end of the day.
Trading outright as a profession is useless and doesn’t increase the productivity of the society.

Please dont compare trading with startups. thats outright stupid & dishonest.

“So if trading doesn’t workout there is a fallback.” - Again, you are only thinking from your perspective. Just because it was a side gig, doesn’t mean traders are not taking outsized risks.
I knew multiple people who earn 5lpa and put 25lpa in their trading account and do as a side hustle and blew their accounts. Yes, they have a day job, but it takes 5 years to recover that amount (assuming no expenses in that 5 years). How is this good for their financial health ? (even though trading is a side hustle)…

“Very difficult to manipulate” - Dude, are you blind ? BN is manipulated on expiry day 3 out of 4 expiry days in a month. Do you even trade? Stock options are day light robbery.

“Its not limited to the stock market.” - Fake doctors are caught and sent to jail, fake teachers are not a big deal because impact is low. Total number of fake doctors is may be 1%. where as 99% of trading gurus are fake and useless. how many fake trading gurus went to jail last year, or last decade. are there even laws to do that?

“Derivative trading is no different from running a business and all the capital adequacy” - did you graduate from dumbo institute of dumboness? do you even knew what leverage means? or how to run a business ?
You are confusing credit with leverage.
If you want to run a business by buying goods and selling goods, nobody gives perverse leverage, if that was the case, whole country would go bankrupt in a week.

“lottery, casino” - all these regulated for the very same reason to stop gamblers from losing their shirt.
“business” is not gambling, it does not give that instant gratification, also leverage is near absent in business world. the closest you can get is credit, which is well regulated and often linked to collateral.

“and put his family in trouble no use of blaming someone else” - Sorry dude, i can’t be as apathetic as you. i dont want my fellow indians, how ever dumb they are, to not make stupid financial decisions and ruin their lives.

“Regulator should strive to ensure equality of opportunity and fairness in the market.” - SEBI is toothless in protecting retailers, hence i am advocating the second best. stop retailers from entering this madness.

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Bruh, your lack of financial knowledge is proving my point.

‘home loans’ - This is not a leveraged product, bank has house as collateral.
‘credit cards’ - Amount allowed to spend is limited directly by your income (capacity to pay) and credit score (measures your financial mistakes).

I am proposing to do the same with trading. Link your trading to your salary or credit score.

‘F&O is relatively safe’ - are you joking? are you saying trading a/c can’t go negative? people like you prove my point that average retailer does not know anything. people who shorted puts went negative during mar-2020 crash. please educate yourself before you chest thump on internet.

“Your broker squares off your position when margin comes to 50%.” - not all brokers do. such days are called black swan days. some brokers close the position even before the position reaches 50% margin.
most traders dont even know that such a rule exist.

“Now coming to home loans…” reiterating my point again, loands and leverage in trading are totally different.
you can be 80% leveraged on your home loan, which is backed by land/flat as collateral, which is not the case with trading. please dont air your lack of knowledge publicly. its embarrassing.

“Salaried class hooked on credit is far worse than trading on exchange” - really is it so ? people buying an asset on loan is comparable to losing money to scams on stock exchanges ? get out of here.

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Really ? what is glamorous about inncoent people getting baited into losing their money ?
Do you remember the regulation-less era of 1990s ?
my dad lost money in 2 chitfund scams in 1991. are you saying my dad deserved it ?

You are crueler than a psychopath if you are against regulation that are meant to protect innocents.
Why stop there ?
Lets remove all regulatory bodies like PCB which was supposed to protect our water/food sources from contamination from pollution.
Let private companies pollute our lands with dangerous chemicals and let common man do quality check of water/food before consuming. if common man can’t do this, too sad its their issue.

You are as perverse as those fake trainers, stock manipulators.

“…Some initial speed breaks are fine…” - These have never proven to be working in any country. why compare ourselves with other countries which are ineffective to begin with. Lets measure the effectiveness of the steps taken. if min.balance is not stopping retailers from losing money, lets get more stricter until our goal is reached.

“…nothing can be done for a person…” This is where we disagree. you are sort of victim blaming here. i cant do that. i want to do whatever it takes to protect innocents. i dont want innocent people to be left at the mercy of bad actors.

“…You really haven’t proven anything…” what proof do you need bruh. 90% of people lose money and fall prey to scams. was it so hard for some hard regulation to protect them? just because they are willingly participating does not mean its right to let them be. why not just allow lottery tickets then. why not allow betting then. why not allow prostitution then. why not allow guns then. why have law & order then. you are already benefitting from regulation, law & order indirectly. i am just asking to extend it to more areas.

Your examples are somewhat relevant. but not 100%.

“…being addicted to video games…” - 90% of gamers are not addictive. if it is, then lets regulate that too.
on the contrary, 90% of people trading lose money. (this data point is quoted by largest retailer trading platform owner).

“… pursuing a career in sports(cricket being a prime example)…” i already answered this before, failing in a cricket carrer does not result in financial ruin of the entire family. where as loss in trading could effect the entire family of trader for decades to come. this example is not relevant.

“…people die from motorcycle accidents everyday…” - and we have multiple regulations to stop this from happening. cameras at every singal, traffic cops checking insurance/license/helments. hefty fines for drink driving, selling bike insurance bundled with purchase, renewal of driving license every 25 years, well lit road markers for safe night time driving, automated cameras looking for speedsters with automatic fines on highways. we literally do everything to prevent loss of life and to make it safe for everyone. I want the same level of regulation to prevent loss of money for innocent retail traders. current regulation is not sufficient.

“…and yet people continue to die,…” - is 90% of people who drive a bike dying ?. guess not. so regulations are working.

“…when alcohol was banned in the united states…” - alcohol/tobacco/mariujana ban is not relevant to our discussion because they can be cooked/manufactured without any special equipment and thus banning them is not a solution. hence they are heavily regulated.

Where as other organized gambling avenues like ‘casino/lottery/betting’ can be outright banned. derivatives trading fall into the same bucket. with out an organized platform, traders cant participate. regulation is the next best step.

“…This Indian Attitude of Parenting others…” - This is not some indian thing or nanny state thing. we already accept being nannied in all other aspects of life. like house loans, personal loans, credit cards, why nobody complains that so many background checks are needed for a simple personal loan.

“…You sound like one of those aunties…” - and you sound like a predatory trainer who promise 100x returns with some secret sauce of option buying strategy, and a white collar criminal who will loot people’s money given a chance and disappear next day.

“…Just because you dont understand something or are stupid does not mean you ban everything…” - I am not asking for ban because i lost money, i am asking for regulation because 90% of participants lose money.

“…USA triumped out USSR because of economic freedom and the freemarket…” - what has US got to do with retailers losing money in India. we do what is best for our citizens, we are not on this earth to copy other nations.
BTW, USA did not triumph over USSR because of free market, USSR is just bad & corrupt.

Relax guys.

@gsecgsec this is SEBI’s fake profile , trying to check peoples perception .
Look SEBI why do you have a problem with everything, if someone wins, someone has to lose , in FNO one gets the result instantly , in stocks the result comes after years of waiting , in stocks too most retail lose money …
IF you are so concerned please introduce long term stock options , like quarterly, half yearly, yearly ( more the time less the risk ) , raise this issue in your next board meeting .

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For the record, I have a full time engineering job, I have founded and run a pvt ltd company and I have been trading first futures and now options for sometime - profitably. I also know people in the retail segment doing the same. So what I am saying is from my experience.

Promoters tend to put all the peanuts they have like Narayan Murthy pledging his wife’s jewellery to start Infosys. In Sudha Murthy’s own words her husband was always broke and owed her money. So when startups fail promoter do also go broke in many cases.

Well we traders contribute liquidity to the market so that the 1% equity delivery trades can find enough volumes on the other side for entry and exit. We also contribute few thousand crores every year to govt because of our trading activity. With the profit we make we also consume and help businesses grow their topline and increase the country’s GDP.

Trading the market is like running a business only. Infact the taxation laws in the country treat fno activity as a non speculative business activity.

The accountability and responsibility for risk and any credits or debits owing to that lies with the individual only. There is no need to put rest of the crowd on the cross for some one else’s fallacy.

Do you now how much money it will take to move the BANKNIFTY index to manipulate it ? Once you find an answer for the same may be you will get enough reason to question your manipulation theories. I grew as a trader from where I started because I always held myself responsible for the red or green I saw on the screen. Self realisation is necessary for salvation.

Please read some news. Over the years people who have commited fraud has been booked. SEBI has been pro actively hacking down on illegality in the space.

I am always for trading with money I have. SEBI has over a period of time cut down the external leverage in the market prompting traders to trade more with money they have. Don’t confuse external margin leverage with inherent FNO leverage. The inherent leverage in fno is what helps in getting a Rs.50 profit when Nifty moves by 1 point with way less risk than the equity route.

Any body in this country can buy a lottery with out any net worth certificate. This is how it should be in the stock market as well. Regulator just ensures that their is no foul play. Also stock market is no casino. Again I would like to highlight how taxation laws treat fno as non speculative activity. But if some one choose to gamble with it it is their problem and they have the freedom to do so.

Why do the lose making companies get billion dollar valuations ? VC funding for growth that is not yet seen or realised ? That is also leverage akin to external margin based leverage in the market.

I want every Indian to be free to try and express themselves as long as it doesn’t takeaway any one else’s right to do so. I don’t want to be a controlling freak that takes away personal freedom. Live free or die buddy.

SEBI is a statutory body in this country with enough tooth. Banning and stopping will only move greed from regulated to unregulated markets. Just like the case with alcohol prohibition in USA as pointed to by @tcpudpsocket

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You must be watching a lot of conspiracy videos on youtube or outright delusional.

there is no point arguing with the likes of @gsecgsec , let him/her live in their own bubble of 70’s license era.people like them are going to drag down the Indian economy,they only find happiness in hurting the growth of this nation,us being on par with free markets like the US/EU. Such people are only going to rot away in their own thoughts.

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“…For the record…” - I know a lot of people who paid thousands of rupees for fake courses and lost money to the tune of lakhs, my own father lost money to NBFC deposit schemes because they are not that well regulated. Just because you made it does not mean others will also make it. I dont mind people like you (who are financially sound) play in derivatives market. you are obviously well positioned to withstand blowout. I am speaking for those who dont have those skills and needs to be baby sitted.

“…Promoters tend to put all the peanuts…” I agree to this part and for the vast majority of populace these peanuts are not leveraged, that means the promoters clearly know beforhand that if the startup does not work, they are bound to lose all the invested money. the same cann’t be said about novice traders. Go to any trader and ask this question. ‘are you entering trading to lose this money’ and the answer will always will be ‘No’.
Which proves my point that traders does not recognize the risk they are taking.

“…Well we traders contribute liquidity to the market so that the 1% equity delivery trades can find enough volumes on the other side for entry and exit…” - No trader enters the market with the intention of providing liquidity. most enter the market to make money. you are just quoting a side benefit. its not worth to sacrifice money of 90% of traders.

“…With the profit we make…” Bruh, do you have a hole in your brain ? 90% of retail traders lose money. i dont give a damn where profitable traders spend money.

“…Trading the market is like running a business only…” govt sees this way. but its not. 90% of people lose money. they dont recognize the risks. they get manipulated endlessly by big fish. they get preyed upon by fake trainers.
its nothing like a honest business and most traders are not equipped with dealing such fraud.

“…The accountability and responsibility for risk and any credits or debits owing to that lies with the individual only…” This is a moot argument again. yes responsibility lies with individual. but most of them are not equipped to deal with such fraudlent and biased system. This argument is nothing but victim blaming.

“…SEBI has been pro actively hacking down on illegality in the space…” and they fake trainers comeup like mushrooms everyday.

“…Do you now how much money it will take to move the BANKNIFTY index…” Do you know how much money is made in BN options by manipulating BN on just expiry day?
just manipulating HDFCBANK alone is sufficient for manipulating BN index. Big fish does this every expiry.

“…I am always for trading with money I have…” Bruh, this is not about you. lot of people are not as responsible as you. my entire extended family is middle class and every family has one such story where they got duped by sales person or bought into some dream of making it big with some secret investment.

“…Any body in this country can buy a lottery…” Thanks atleast you compared trading with lottery and do you know the probability of making it in the lottery. and most of the customers of the lottery are the poor people, who can never break the cycle of the poverty.

“…I want every Indian to be free to try and express themselves as long as it doesn’t takeaway any one else’s right to do so…” Why stop at trading. lets remove pollution check, lets remove quality check for petrol, lets remove audits done for educational institutions, lets remove fire department checks for buildings, lets remove checks on builders, lets remove auditing of results of public companies, lets remove CAG, lets remove ACB. lets remove all regulations and live in regulation free uthopia where the customers do their own homework and determine what is good for them.
Just because you are benefitting does not mean the system is good.

“…regulated to unregulated markets…” as it turns out derivatives has no unregulated markets.
I also explained why comparing stock market with alcohol is not a valid argument

And people like you exploit the system at the expense of poor/innocent people and live in lalaland that believing that you are genius, all the while benefiting from the regulation of banks/institutions. We dont become US/EU by looting poor people in the name of freemarket.

You will have to store money in your mattress if not for banks being regulated heavily by RBI.
Why not bring the same level of protections to stock markets.

FYI, EU is heavily regulated more so, than India. Your are just a brainwashed twat who think the ‘regulation’ word is dangerous with out even considering the examples i quoted.

Look at the crypto currency market.
It is filled with sh*t coins and scam artists.
Thats what unregulated markets looks like.

Pray to god everyday that you dont become victim of a scam, because the way you all are defending to prop up fraudlent system just because you were able to profit from it and your apathy towards less fortunate is appalling.

God save you all.