i am confused about the statement; will this be for derivatives or equity as well?
@fin9 @ManishAstral
https://www.business-standard.com/article/markets/sebi-mulls-hiking-pms-investment-threshold-118082000884_1.html
I dont understand why retailers must be discouraged.
Its for both
I am not getting it, cud you explain?
Me neither. Some devious plans else what. Because some random guys without any knowledge or skill just loose his capital by doing wrong things the rest of the retailers who are taking the right approach is suffering. Its like taking away driving rights from all drivers just because a drunk did an accident with his car. Weird.
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Thank you ManishAstral
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https://www.firstpost.com/business/sebi-eases-norms-mfs-rs-50-cr-net-worth-launch-schemes-2024799.html
Here SEBI has wreaked havoc on Mutual funds also. And as a tuglak idea, is giving some a second chance to survive. Quantum mutual fund is a pioneer in direct selling of mutual funds but now this innovator is struggling to stay afloat. SEBI does not want the hard work of educating the investors. It wants the easy way out.
No people ! No problems !
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Sorry which one, can you comment here.
I would like to propose an idea for SEBI consideration, how about SEBI brings in the instruments of creating mini contracts in F&O segments exclusively for retailers and restrict participation by, if not the HNI but Institutional’s and HFT’s trading these contracts to mitigate the risks if any to the retail traders.
@Vandana1 @p699 read the whole thing, also signed the petition, just one thing, this would be for just the derivatives or cash markets as well?
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in order for the mutual fund industry to prosper at the expense of retail traders. One must remember that this is a zero sum game where gain of one is loss of the other and vice versa.
Imagine that instead of you as a retailer making money, they artificially create restrictions for you and ensure that all your money is diverted through to mutual funds - they would not only have your trading capital, but also your profits which is given back to you ofcourse, but after deducting the steep performance fees and expense ratios etc.
@nithin Sorry, I was asking about your view on @Vandana1 comment above
Instead why doesn’t sebi reduce the lot sizes of derivatives so that small traders can also afford to trade in them …or introduce mini versions of stock and index futures instead of barring small traders from derivatives completely
@nithin, If I understood the proposal correctly, these restrictions will only be for traders and not investors, right? My mother, who is now retired, and hence has no taxable income would NOT be forced to sell-off her existing equity portfolio which she built over the past 2 decades?
I had read that Amit Shah was a stock broker before he plunged into politics, Piyush Goyal is a CA… any official channels of reaching out to them through brokers or traders association?
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I am thinking out loud in this case. Since the general idea is to protect a traders capital wouldn’t it be more prudent to track his opening monthly balance and if he/she blows through 50% of that money suspend them from trading for a week or so, in order to give them enough time to reflect upon their trades and figure out where they went wrong etc and also figure out whether trading is a viable profession for them at all. And if the trader comes back and loses out another 50% of his capital give him/her a longer suspension and refer him/her to a support group of sorts where he can pick up the necessary skills. This way the leverage can be used judiciously which in turn doesn’t limit the profit potential for the proper trader while also preserving capital for the impulsive gambler.
In many cases I find that traders blow their accounts in trying to make back money on losses either through revenge trades or by adding on to losing positions and I am sure there are other instances of such behavior as well. So in such a case the suspension would at least stop them from over-leveraging in trying to make back the money lost.
Also I feel that education , certification , one’s mathematical faculty and the things in that line don’t really matter when it comes to capital markets. Since there are enough examples of highly educated people with all the relevant certifications and accreditation and of course “sophisticated” traders (which seems to be what SEBI is looking for) bungling trades worth billions of dollars. Brian Hunter had a master’s degree in Mathematics.
Nothing really prepares you for the capital markets other than real time experience in the markets. And experience isn’t usually pleasant. They say, " experience is what you get when you don’t get what you want" and I find myself agreeing to that. And some people simply cannot handle experience. The idea should be to curb the gambling instinct because that’s what usually ruins people, not their inadequate net-worth or their degrees or lack thereof. I think the suspension rule is a fine balance as it doesn’t hurt the retail trader however small his position in terms of capital and it also keeps a check on the impulsive gambler from blowing through his capital in a fit of revenge trades etc.
Another down-side that I see to this net-worth approach is that a gambler will want to gamble so he is going to loan more money to fit into the criteria. So that extra money will probably come as loans commonly from relatives, parents etc. And if its not the Indian Equity markets then he will blow it on Binary options or online poker for crying out loud. Coming to poker on similar lines there is Negreanu and Ivey among others becoming legends by developing and playing their system while most of everyone else are blowing their wads and relying on luck , hope and prayer.
I recently read an article where the author is of the opinion that wealth is an indication of intelligence to a great extent. That sort of sentiment is worrisome. I wonder especially since 20%-30% is inherited wealth so that part doesn’t require a discussion but for all the self-made millionaires and billionaires, I wonder whether they all started out being millionaires or did they have to start from that 1st dollar and build from there on.
I just think that there is so much more to trading than what can be perceived from the outside, it is so much more psychological than it seems. And there is so much more that cannot simply be quantified through ITRs and net-worth certificates etc. The years of research, thousands of hours looking at the charts , developing a system , implementing it, refining it, experimenting new setups , processing all those losses and so much more to achieve what we as traders set out to achieve, consistent profits … Your thoughts? @nithin and everyone else
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@nithin dnt u think HEADING for discussion itself is wrong
It is not “MARGIN” but “EXPOSURE” which is gonna cap in official written document agenda for 28/03/2018,
dats d reason SEBI is doing dat…
We retails takes thingss so lightly that forget what exactly the issue is…
Same way SEBI thinking that we dnt know what derivatives are…
Feeling bad… :’(