Peak margin requirements from Dec 1st 2020 & its effects

After T+5 days.

Hello,
Once we move to 100% var elm with min 5x in stocks, what is Zerodha’s plan ? Will you offer atleast 5x in MIS for most liquid stocks as you do now or will it reduce even further ?

Right now i see that zerodha requires 50% var elm for MIS and so there are a handful of stocks with less than 5x leverage. That is fine, but once we go 50-75 and then 100%, what will zerodha do?

I trade intraday and would prefer to get atleast 5x in most stocks as it is today.

Unless stock is super volatile, you will continue to get at least 5x in most stocks, like today.

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@nithin @ShubhS9 @siva
After SEBI margin Rules Is fully implemented i.e September 2021 Do you think there Will be increase volume in equity options trading

We can also just guess as of now, our guess is as good as flipping a coin.

Why is SEBI so hell bent on making markets miserable for retail investors and small players. I really don’t like the new margin rule and the rule where only 80% money is recieved on selling holdings, also they scrapped out the crude oil mini earlier which was the only one accessible easily for many small and retail investors.

Can’t we do something regarding this and is zerodha currently doing anything to urge the authorities to change this?

just curious to know

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Zerodha saying that they are opposing this move and requesting SEBI to allow the leverage from broker funds

FYI:- One company named Wisdom Capital filed a petition against this move in Delhi high court.

Court refused to give stay on this but asked SEBI and Government to give explanation on this
and next hear on March 2 2021

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Volumes are drying out a lot. It seems cash market will be the only place for the small retailer unless SEBI stops the peak margin requirements in its tracks now.

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Zerodha is actually supporting this move. With standard leverage across the board, people are gonna move from small brokers to Zerodha. It’s gonna help their business eventually. Why would they not want that? Plus, Zerodha is a big time supporter of SEBI. They praise every single move they make.
AFAIK, only Wisdom capital has got the guts to take it up against SEBI. You wanna know why? Because they have it in their freaking name : ‘wisdom’ which everyone else lacks.

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But SEBI has always wanted that, right? To purge retailers out of the stock market. And they are finally gonna achieve it. Let’s congratulate them.

Don’t think so, volumes are not that much effected as of now but after sep it will. Also markets are going up.

Markets are going up no doubt, but that is not correlated with the volumes. You can compare the daily volumes stats that are available on the NSE site. There has been a 7 to 15% decrease across all segments, before and after the introduction of peak margins.

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This will result in a significant flight of capital from the markets if left unchecked. I hope better sense prevails and they roll back on this. Or at best, curtail it at the present stage. That ways, they can also placate their bloated egos somewhat.

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For those of you refuting that volumes aren’t going down, here is an image suggesting otherwise.

image

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There has been like a 30% decline in volumes from what I have read from news sources but that is obviously not ‘significant’ according to Zerodha. Blind devotion to SEBI is really strong with them.

While that’s what most retailers want, Sebi ain’t gonna do that. They have never stepped back on their decision. A tyrant is what they are and they don’t really shy away from acting as one. We retailers are merely ants, lacking any voice whatsoever. Unless we stand united and oppose, there’s no way we can topple these draconian rules. The sad thing is that brokers aren’t even taking our side. They just wanna bootlick authority. But whatever. Dogs are dogs and they shall remain so forever.

Open account with finvasia zero brokerage. When brokers do not get brokerage then they understand

For november that is last expiry but for december it is first week, normally last week will have higher volumes, you can compare last week of expiry in december. My point is there is no significant change as of now but for sure it will be after sep 2021.

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Hmm… news from where? This is from NSE website

Check the turnover difference between November and December. Tell me where you see a dip of 30%?

Equity

F&O

Click here to see the report. January shows less because we are just 3 days into the month.

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I believe Impact will get visible only from March, at the current leverage level, restriction is not significant given the largest broker Zerodha and next 2 brokers were already very close to Dec limits.
We might see option volume drop, as intraday writing becomes bit more limited, option price might go up ( my estimate is about 20% increase in price) which might push some buyers out…
lets see what happens in march, whether it pushes us further into longer contracts.

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