You cannot. You need cash balance to buy options.
Thank You Sir.
If I sell option first with my collateral margin and then use that collected premium for option buying is it possible? In short can I use collected premium to buy the option very next minute?
It is obvious that SEBI members is friends with big option sellers or they themselves is option sellers, what option sellers want on expiry day? close the index at strike they want to eat all the premium. Removing calendar spread is another proof, now we are forced to buy expiring hedge so those big option sellers get even more premium.
By raising lot size they can kick small option sellers out of market, what is the result of this? raise in option premium like American market, which means more premium for big option sellers.
Our market is not even volatile, its moving max .5% either side on daily basis, they made up all BS stories to change the market for their benefit, and to raise tax.
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If these measures do succeed in curbing f&o mania then i will be happy with it, it is true that people who have absolutely no idea about derivatives are risking huge amounts of capital, one helper in construction ask me about bank nifty options a few days back and i was stunned, his monthy income is 20000, and there are countless cases like that, it needs to be checked and stopped.
I welcome these moves from SEBI. Itâs in the best interest of retailers.
95 out of 100 ITR with Fno are loss returns.
Proposal #2 - Upfront collection of options premium:
Can you elaborate more even for option buyers need to pay more margin then actually
Example (15 lot ) price @ 220 need 3300 rs for buying.
Is buying margin increase like 5000 rs in above example ?
f&o should only be allowed for thise who earn a minimum monthly salary. this way, the risk is limited to those who can afford to take it. a unique id should be generated by the employer for each salaried employee, which the broker can link to the government using the pan or something. this provides concrete proof of income. or some similar idea like this.
i often see people posting verified p&l with comments like â1.2cr lost todayâ or â65L lost, will try again tomorrowâ with a smiley emoji. they do this because their high earnings make such losses insignificant to them. the real issue arises when people who donât earn enough lose everything.
implementing some idea on thse lines or something to uproot the base problem could be a solution. however, I do realize it might not happen as it would significantly reduce market inflows. a major loss for the hungry government.
Bro , Excellent analysis
Guys you can Submit your Opinion to SEBI to this address
[email protected]
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[email protected]
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pls cn someone tell (jst a rough idea) till when cn we expect final implementation of these new rules . if happening soon, thn i wud stop trading frm august (bcos if drawdown comes in my strategy thn i wudnt hv time to recover) @ShubhS9 @siva
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august 20th
Can someone please explain the information pasted below regarding contract size with an example? I did not understand this. Thanks
Proposal #5 - Minimum contract size:
Given the growth witnessed in the broad market parameters, the minimum contract size for index derivative contracts is to be revised as under:
Phase 1: Minimum value of derivatives contract at the time of introduction to be between 15 lakhs to 20 lakhs.
Phase 2: After 6 months, the minimum value of the derivatives contract is to be between the interval of 20 lakhs to 30 lakhs
100 qty for nifty
150 qty maximum
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eg. banknifty is at 51500, so contract size wud be 51500 x 15 = 772500. so they hv to keep b/w 5-10 lac for each strike price. this will be increased to 25lac so they wl increase lot size to 50 or 60 so contract value will come b/w 25 to 30 lac (50 * 51500 = 2575000)
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this is how i understand it- mostly conjecture at this point
nifty is currently trading at 24850.
the minimum lot size for 1 nifty fut contract is 25.
we get the value of one nifty fut contract by multiplying 24850 by 25, which amounts to Rs. 621,250.
now, the proposal stipulates that, after 6 months, the minimum value of the contract will increase to 20-30 lakhs.
assuming that the price of the nifty fut contract remains the same, ceteris paribus, we can ascertain the minimum lot size by dividing 20/30 lakhs by 24850, which turns out to be between 80 and 120.
we can therefore expect the minimum lot size of nifty to increase to 100 (factor of 25, and lies between 80 and 120)
in a similar vein, in the (unlikely) event that bank nifty derivative products continue to be traded, we can expect the minimum lot size to be 60.
TLDR- the minimum lot size will increase by 4 times
hope this helps 
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If this were to happen, the beast would be dead.
(2017-2024)
Something is missing sebi rationale that 90% are losing money in derivative doesnât make a sense as from the very start of trading this is very normal that many people lose money ,only few are making I think the issue will be fii and hft who are winning more and Indian retailers are the one who are losing this money ,
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No idea, but can take minimum of 3 months according to me because few changes are required in Risk management.
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