SEBI is planning to curb excess retail participation in markets very soon

This discussion has been going on from years but SEBI may finally take some drastic steps to curb excessive retail trading in F&O

If this happens, the industry will have drastic changes and the implications will be crazy.


Currently in our country any one can start a business without even proper education or net worth (apart from some specific sectors). FnO trading is really a business activity. I am hopeful that some sanity will prevail. I am hopeful that the retail would be left alone to their freedom to choose, take risk and trade the market.

Current SEBI chair sometime ago



Also in the budget they are increasing the STT forecast every year ,but here SEBI is trying to control retail .

How exactly the brokers will determine networth? They are not a tax agency, ITR and bank statements can not be accurate parameter of networth.

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SEBI is probably seeing all the retail traders and thinking like all are shouting BACHAOO and they decided… OK!!

Bachaoo Help GIF - Bachaoo Help Motu GIFs

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If retail does not make losses then how the institutions will make profit?


They should do based on minimum deposit.

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Exactly, so the reason they said physical settlement… take an example of this series, Pharma was rocking… Lupin 980 ce was available at 0.3 Paisa … it went and hit 10 rs… almost every Pharma share behaved same way…
If it want to protect retail investors they can allow for cash settlement and anyone can trade freely with minimum investment…
They won’t do that and they say they are protecting …
What happened to n no of companies where retail investors lost by buying equity…the list is vvv long … they don’t take action nir allocate shares when it goes for nclt …
But they want to protect now . … few things never change…


Both physical and cash settlement have their respective drawbacks.

By considering the other side of the equation, it becomes evident that cash settlement tends to encourage speculative trading and market manipulation, while physical settlement offers more stability, as it is supported by actual shares, and fosters better price discovery. This physical route is often preferred by long-term investors seeking a more reliable and transparent approach.

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Trading is not a business activity, it does not generate any products or services or any long term value.
It just lets one entity take money from other entity, govt gets a cut in between.

Given that 90% of traders lose money, and F&O trading is a leveraged activity, people lose way more money in a short period of time for no fault of their own.

If SEBI doesn’t outright ban F&O trading, i would be disappointed.


Thrilled to see you disappointed!

Thanks for sharing :slight_smile:

Why why why? If you do not want to trade please do not trade. Those who are willing to take a chance and test their skill why not give everybody an equal chance?

I am all in for entrepreneurship in general.
I am also ok with trading without leverage. (any form of margin).
if someone wants to trade, let them front full margin, that is the only way traders know how much risk they are dealing with.

In business world, if a entrepreneur wants to take risk, banks will do credit worthiness, ask assets for collateral, makes sure your business itself is not risky to begin with. so entrepreneurs know exactly what is at risk.

hehe. pray daily that i don’t become SEBI chairman. :rofl:

No. Not really. What if he is purchasing on credit basis? Indirectly he is taking leverage.

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I don’t want to say it but the only thing comes to mind after reading your comments is “grapes are sour”.
Even majority of cafes and restaurants fail within a year of their opening. So we should ban that too?
Even 90% of startups fail so should we put a ban on that too?


Good example.
There are 2 types of credit.

  1. secured credit: either by bank or 3rd party. this is the example i quoted. where the borrower of the leverage knows the risk.
  2. unsecured credit: mostly by your business counter party (loaning goods until final sale is complete): this is not as dangerous as it sounds. most of the time, the business counter party gives unsecured credit only if the business is repeat customer and in good standing. so actually risk is very low.

My dad does (2) a lot, like a lot. but its not offered to new customers, but only to repeat customers.


You can ready my answer again. i addressed this as well.
Even if 90% of business’es fail (make it 99% if you want), that 10% of success’s in entrepreneurship will result in long term value addition to society.
I am also a strong proponent of tax incentives for business’es, for this very reason.
Take reliance for example, it’s in that 1% of success stories, and employs lakhs of people, adds value to society, let people learn new skills, which they can use and build more businesses.

Where as trading, just moves money from my a/c to your a/c and does nothing else.

BTW, if i ask my friend not to smoke, i am saying so because i want my friend to be healthy, not because i am jealous he is getting cancer and not me. lol.

Nithin says this

People think traders, the kinds who trade F&O, don’t add value to the capital markets. The truth is the exact opposite. Without traders, it would be impossible for an exchange to exist in its current form, where investors can buy and sell securities with minimal impact costs.

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