I think this action by SEBI will be welcomed by majority of the established brokers in India.
Responsible retail traders might find this revolting , But there could be a dark side to Derivative trading by ignorant individual investors.
This could be the chicken trap where majority of the punters bet all their savings in the hope of become wolf of wall street and become Zero.
So because of some ignorant trader should the informed traders suffer ?
Educating the masses is the only way out(that is same as product suitability test). The current set of methods SEBI is employing will be counter productive. They can always improve SLB and increase taxes on derivatives and make tax on equities nil.
This is a good move by SEBI.
uninformed and inexperienced traders can lose a lot of money on hope. They need to be protected. Education won’t help as there is plenty of it but no one pays any attention to the risks involved in trading.
For the informed/experienced traders , no need to worry because they are sufficiently capitalized and are making tons on money. This will not affect them.
I dont agree with it absolutely. Everybody will lose because of less volume !!!
Obviously, in life anybody who does not care for himself will get hurt. You dont go about preventing people from eating ice creams because they are in danger of getting diabetes !!! This is what SEBI is doing. Reckless people need to get hurt and learn it the hard way. SEBI needs to focus on much more important issues.
How can you be sure that experienced traders are rich guys ? Yours is not a valid point.
Does any other country has such rules ?
No one is stopping them from trading. you can still trade in equities and still lose your shirts and pants.
They are only increasing regulation to protect them in FNO segment. This is good.
A retail trader simply cannot participate in a highly leveraged instruments like FNO. Thats madness for retail traders who are inexperienced and under capitalized.
you analogy of eating ice creams is not valid and does not hold good to trading high leveraged instruments.
what you should say is, eating 10kg of ice cream on regular basis and then compare it with getting diabetes? No?
SEBI is not doing this out of some stupidity. They have the statistical data and they are taking this decision based on that data.
Ask @nithin and he will give you the data on how retails traders blow their accounts by trading FNO. Not sure if he will share that data , since it would hurt his business. But you can ask any brokerage firm if you know them personally.
you can be sure experienced traders are rich , because they are making money and they are making money because they are experienced.
SO according to your logic, SEBI SHOULD BAN equities for RETAILERS ??? A fool will lose money in anything except in fixed deposits. An ice cream addict needs education about health, not tying him up to a tree !!!
You dont have to ask Nitin again, he has already said something similar to what I am saying…
No where in the world is there such restrictions applied !!!
So according to your logic how does a newbie get into derivatives ? He has to be born experienced and RICH is it ?
Besides there are more important tasks in front of SEBI instead of acting like a school headmaster.
Retail trader equates people like us. If you want to protect us there are many ways for achieving this. Issue ticket to politicians who are not corrupt, start one nation one election, create enough jobs to support our exploding population, promote entrepreneurship, provide food and home for hungry fellow Indians (these schemes never reach general mass even if some of them are launched in past). If you can’t, shut your mouth, let us decide what good for us, which we have been doing well since decade. Most importantly stop being a wolf in sheep’s clothing. Stock market is just like any other business with its pros & cons.
Exactly !!!
LOL when did i say you should ban equities for retailers.
Infact you actually lose money in F.D considering inflation and taxes.
All addicts know the issue , but cannot control themselves, hence addicts.
where has nithin publicly published the data on FNO traders? can you please show that.
There are plenty of restrictions similar to this in other countries. For e.g. they banned CFDs for retailers in US, while its allowed in UK.
how does newbies get into derivatives? you must be a professional trader handling big capital, only then will you get this experience. How to get his experience, go work for a brokerage or prop desk or a hedge fund. Why is this so hard for you to understand on how to get experience.
Retail trader trading with minuscule amount is one thing, trading high leverage is another.
Yes, there are important tasks , but isn’t protecting native and inexperienced traders one of them? if they don’t , then you will cry that SEBI is not doing anything to protect traders. LOL.
Educating the investors about the risks, as many have mentioned, is the way to go. Without this, the uneducated investors, will only lose more with higher FNO size and higher margins. It does not appear logical to make a person lose more, because he can afford more.
your points are absolutely right , SEBI is doing blunder after blunder
Yeah ! You said it better !
You are not getting it dude. Please read again.
One suggestion to SEBI…
In USA, only people who have passed certain exams can go trade in a prop shop. Similar rules can be brought into India. Let SEBI conduct an exam, which when a candidate does pass, can trade derivatives. Otherwise no access. Increasing margin requirements/lot sizes reeks of class warfare !!! 
Only the rich are allowed to get richer ???
I m asking for the data. i know what nithin has said.
you are not getting it Sir, Please understand difference between FNO and equities trader from a risk perspective.
In Equities , you can control your leverage on intraday basis. Hence you are in control of the risk parameters for your trades. This is absolutely fine.
In FNO, you cannot control the leverage. you have to mandatorily stick to exchange lots. Hence the exchange is controlling your leverage risk. you are not in charge of your leverage. Therefore you MUST have a huge capital to trade within your risk parameters.
Only way to fix this is to have a product similar to CFDs. But i don’t see that happening anytime soon.
I agree with you here.
That will not happen because its not in the best interest of a small time retail trader.
There is no incentive for exchanges.
Only if ALL brokers push for CFD like instruments, retail traders will be benefited.
FNO products are simply not meant or designed for retail.
Why not ban f&o trading completely for retail traders. What is the logic behind linking an individual’s income to his ability to lose money in the market. With more income an inexperienced trader will take more leverage and lose more money. Just because someone has more income doesn’t make him immune to losses. In fact even experience in the market doesn’t guarantee successful trading. Don’t 90% of people who try their hand at trading f&o or equities or currency or commodity loose money. Feels like day by day we are turning into a nanny state.
That will shortly happen , do not worry. LOL.
instead of SLB segment, they should focus on CFD like instruments.
No ! you are wrong again. SEBI must improve SLB and incentivise equity trading. Not another derivative product for gods sake !!! FnO is enough.
why wrong. CFDs work very well, only if they were regulated.
SLB won’t work , if it did, we wouldn’t need FNOs for retail.
if SLBs actually worked , retail would have a good chance to make money.
Just hope they show consistency and this moronic regulation is stuck in red tape just like everything else.