You are right Subrmanya, in deed retail participation is quite low in the Indian Market. Reasons are many for this, lack of investor/trader awareness being one of them.
However, remember a trade is complete only when a buyer and seller agree to transact at a specific price. Even if a FII or a DII decides to sell, they cant, if there are no buyers for their shares.
Likewise for Buying…if there are no sellers then the trade wont go through.
So, true. Looking at the way all the stocks traded on friday(9thMay2014), ur apprehension is correct. Also, Elections 2014 would be the election in which Computers(automated trading) would be our companions in the trading for the FIRST time, which were not present during previous elections. I think, trading for the elections 2014 would be like putting money in the Hundi(temple). Bhagwan ne aankh khola tho lottery, otherwise, it will go to hundi. So, what’s ur #HUNDITRADE !
DII participation includes retail participation as well. DIIs and MFs collect money form retail investors and invest/trade in the market. All over the world exclusive retail participation is only a very small % of total investment/trading activity. Of course retail participants provide the proverbial fodder to the professional traders by entering the market at the peak when traders are distributing and exiting at the rock bottom when traders are accumulating. What is the % of retail investors following value investing, systematic investing, etc? Very small I presume.
The ans is quite simple. When some one sells in large quantities, the price shall drop and every one else jumps in to buy them.
which is why many advocate "Buy when every one else Sell" and "Sell when every one else Buy"
The above holds good particularly for medium to long term traders. FII's and DII's seems to be mostly of this category.
There are certain limits set by the SEBI / EXCH for each scrip, which is why you get the msg "XYZ has reached n% of limit"
thanks for the info