Ok fine…give me settlement number because u deducted sebi charges…against which it is deducted? Or it deeucted arbitratory?
At any given time a privileged information plays in the markets which retailers are unaware.
The inherent question : Why Crude options not getting expired on same day of Crude Futures expiry?
If options expiry would have been on the same date of Futures expiry then most buyers of the Futures contract would have hedged their positions with buying Put options to protect the risk associated therewith.
Is it a matter of negligence from the Brokers/Exchanges/Regulators
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@nithin you explained most of things but what were the technicalities which caused crude to go negative. Suppose I am a hedge fund with 10 million usd exposure on crude(long) at price of 15usd. Can’t I just decline to take delivery of above commodity and let the counter party keep whole 15usd. Why would I cover my long positions below zero instead of letting go my whole purchase value. What does exchange or SEC (US)regulations say in that regard.
This is specific to that particular expiry, as you are saying hedge fund with big exposure on MCX that fund will be more careful either by closing position on time, or rolling over. Anyhow broker is liable in this case, MCX will deduct money from broker, if broker don’t have own money then other client funds with that broker will be used, it doesn’t matter if fund want to take position or not. If broker money is exhausted including it’s clients money then mcx clearing corporation has to settle it from it’s own, mcx may use investor protection fund.
Later hedge fund has to cover full debit balance, that is on broker to recover it, they may go legal route but that is secondary.
Ahh my query is nowhere related with mcx or in fact India . That is all about US spot and futures and OTC market and their regulations which we are not aware of.
If price is going south and if enough margin is not available then position will be closed by their risk management systems, rules are similar everywhere, broker is liable.
Margin should be equal to contract value .
Retailers have no right to trade-in crude mega lot.
They r sprleculation only
Whole market is speculation only.it is individual interests to trade in instruments which they are comfortable, only problem is not being conscious and over confidence to take trades without any proper experience or advice. Trading on technicals and giving reasons like rsi below 20 macd crossover etc etc. Fundamental oil market dynamics move the price both spot and future.such incidents reminds us again and again the risks associated.
The incident that happened on march also was fatal for many a 1000pt negative open on monday they lost around 80-90k per lot there were many with more than 20 lots at that time ,only people who lost know that.
Crude oil speculation Without knowledge is just economical sucide .
MCX work only for big player got that they stop miNi lot of crude and put retail speculator in huge risk .
Although hedging not works properly in commodity section
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I completely agree with that,mcx can impose new rules and regulation and they can say any reasons,earlier it was said to safeguard small retailer but it ended up in huge impact.traders need to make neccessary changes and stay profitable.because we have power only to control our actions.
This is wierd. Any reason why options won’t expire on the same day as futures?
For may contract Options expire on 14th, future expires on 18th
Hi Nithin,
Thanks for reassuring the investors. But even in the worst case that losses are very high due to such events, in this case both broking and commodities are different legal entities and for all practical purposes have no relationship except for holding company if any. How would this affect Zerodha broking investors?
But exchange told it will settle at rs1…so they didn’t keep their words
It won’t effect in any way.
This April Crude Oil contract , there was a substantial losses to me because of holding long position. My question to Zerodha is , weather they went to High court on behalf of their clients ?
I understand that many brokers went High court , to save guard their client losses.
Can anyone update about the court hearing ?
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The hearing is on 29th April
We haven’t gone directly, but are doing it along with Commodity Broker association. By the way there is nothing going to come out of it, the payouts have already been made to the sellers of the contract, there is no way to get back that money now. Also all other global exchanges settled at the same price (Singapore, Dubai, etc), nothing much will happen in the court. The only hope is that the exchange puts in some mechanism for trades to happen at negative prices or else say that settlement won’t happen below Rs 0 in the future.
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@nithin
Sir i am so Upsat Due to this incident and i have a loss in my account due to this negative settlement …
i am a employee and i dont have this money …so please help me.
@nithin
As you mentioned this is unfortunate situation and also you are aware decisions are against investor/broker. But finally investors are forced to pay 4X times amount for trading with 1X capital.
As you know so many small investors are having sleepless nights as they can’t fight directly with system. You can see the response on this forum also.
What should investor do now know if they don’t have money to pay? Please suggest.
Whatever happened completely unethical/unlawful for investors.
Also please fight for the cause of retail investors. In this pandemic situation, some traders equities are also sold out and money is taken by Broker.
I don’t have words to say about the situation of investors.
System is never in support investors and they can’t fight against system. That is reality!!! I am praying to god to help small investors …
Today it happened for Investor…Tomorrow it may happen for Broker