Unreasonable penalties being charged

Because the new rules boil down to having higher margin requirements which means less leverage obviously and I can not help but wonder how long until the futures market is destroyed completely and we can’t do anything about it.

Am merely reflecting what you are feeling.

Market is an arena where mercy is not expected nor shown. If you have the clout make your own rules.

Use change.org to voice your concern and we will sign the petition

@Newbie420 I think retailers should be in Intraday only. Because losses can be smaller. Positional trades create bigger losses. …all this assuming the retailer has talent for intraday. I think options cut deeper than FUT and difficult to predict too.Less liquidity too.

@Avi_Garg Speculation cant be eliminated. But it HAS to be minimised to create smooth/logical markets. Otherwise irrational exuberance will make retailers very rich and cut them to pieces the next day. SEBI’s actions are hurting me too but I support them because they are trying to minimise irrationality and manipulation. Its a long battle. And nobody can refute this, that they have better data/info than us, so they will take better decisions. AND ONCE SLB PICKS UP YOU WILL STOP COMPLAINING :slight_smile: TILL THEN STOP PLAYING ON THE EDGE.:pray:

Yeah, you are right. Didn’t think of that. Thanks. But at the same time I feel like people are not going to be supportive and they are simply going to succumb to whatever sebi does.

If volumes fall too low, SEBI will swing your way. Dont worry.
And See the recent data… Derivatives to Cash ratio has fallen. Thanks to SEBI.

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Maybe waiting might end up in something good. They are going to introduce longer trading hours as well so that might be a saving factor to whatever new rules we are getting all of a sudden. But I have a pessimist hunch to this as well(because I have lost trust in sebi) that there’s going be something with the extended trading hours that is going to make it more or less of a failure.

OK , lets think this through for a minute.

Higher margins means more money required from EVERYBODY, this means the no of positions will reduce overall, because as per ones risk management , now you can buy/sell less number of contracts.

Now less number of contracts means fewer trades being done on exchanges. This means exchanges and brokers lose business.

So the direct impact of this is a loss for exchanges/brokers and even govt’s because less taxes.

So why would SEBI do this? They must be idiots to reduce business for exchanges and brokers.

And why is it that brokers are not crying over this?.

Yes, this is totally unfair to exchanges and brokers. How dare they.

Now sarcasm aside, the reason anyone has to do this is because our markets are at an all time high. This means the risk for draw down or pullback is increased significantly. why? because people will book profits for record profits. Also if a recession does loom around, EVERYONE is at now at higher risk.

In simple terms understand this, more margins = more the risk in markets. This is a risk management for the entire market.

Expect an increase in margins going forward and don’t worry futures markets will be there longer than you and I.

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You actually got my point. But how long is this gonna keep up?

The risk has to go lower , as of now the perception of risk is higher. No one wants to buy at the tops.

A decent pullback of about 30-40% might reduce margins , but no one can say when that might happen.

Then you do understand how margins and risk work. Then why are you crying?.

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Yeah right whatever. Thanks for the reply though.

@Avi_Garg I have experienced market manipulations myself and hence I will support SEBI if its actions are going to reduce it. Market fairness is my biggest concern.

@trader_dude I dont think SEBI is increasing margin requirements because the market is at a high. Maybe it is a smaller reason. It is trying to tame the manipulators with these new rules.

@Avi_Garg I think you should create a petition to SEBI chief on change.org or avaaz.org and provide the link here and other investor forums. Based on the validity and rationale of the contents of your petition, fellow traders might choose to support you and finally it gets delivered to the authority who are in position to decide.

If you decide to take this path, be sure to consider the point that while a trader must be allowed to make use of his funds without the fear and burden of unreasonable penalties; the rules on penalties must be such that irresponsible traders are not allowed to make the trust in financial markets collapse just because they took over leveraged positions that they do not have the capacity to honor at settlement.

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Really, why should everyone suffer because of a handful people who don’t know how to trade responsibly? Lol there was this guy on Moneycontrol forums who said that he bought a 1480 CE Asian Paints one day before expiry. The stock was trading at a high already and it obviously corrected to 1450 and below. Now seriously why should SEBI protect this guy. You can’t. That’s how the market is. Someone has to make a loss and some will make a big loss and that is inevitable. And look at the way they are doing it. Penalties? Seriously? What’s to say people are not going to use all their funds and end up imposing penalties on them. Like what’s stopping them? Putting up a penalty like this is only a suggestion as to not using all your funds and it hurts the business of the market more than it provides any benefit because hey you can’t absolutely protect someone from loss in the market. Not even equity guarantees protection against loss. That’s how it is. But it hurts. It hurts because it restricts those who trade for a living. Leverage isn’t necessarily bad because with leverage I can get more for less which means diversification of my funds which by itself is a risk aversion strategy. And also when did it happen that we are informed of this stuff. Neither SEBI nor the exchange and nor the broker give us a direct message when these rules are put up. You have to find out on your own. I found out too late and paid heavy penalties. Like seriously, it’s ironic. Anyway, I can rant on and on and on about this. Hope everyone realizes what is happening is wrong and stands up against this.

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@Avi_Garg Let’s have a hypothetical market scenario, where there are only two traders, you and me. You are the competent and responsible trader and I am the incompetent and irresponsible trader.

I take 10 times leveraged position using my one lakh and you are on the opposite side of position. The position goes against me, but I am neither made responsible to replenish my MTM loss nor penalized to wake up from sleep and act responsibly.

At settlement, you are making say 3 lakh of profit (being the competent trader) and I am incurring a loss of same amount. I in no way would be able to honor my settlement obligation because I have just one lakh in my pocket. Who would you hold responsible to receive your hard earned profit; me, broker, exchange or SEBI? Remember, I have just one lakh.

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Here have another heart. Things are complicated indeed is all I can say.

Haha,

This rule has been under discussion for more than months before implement.

Z was sending emails and notice 1 month before.

I guess you were too busy making money.

I didn’t get any emails.

So, you are saying you did not get this important update from Zerodha?

only a few select customers got it?

If it’s May 29th then I must have missed it or ignored it or whatever. I was still new back then.