Read this article : http://www.moneycontrol.com/news/business/markets/sebi-may-soon-take-measures-to-limit-retail-participation-in-fo-market-2485375.html
What do you think will be possible issues with this?
#edit : this is link of sebi white paper https://www.sebi.gov.in/reports/reports/jul-2017/discussion-paper-on-growth-and-development-of-equity-derivative-market-in-india_35295.html
If You will make lot size of 10000, 20000, 30000 Then Yes Retail Traders are at High Risk.
That article is not clear in certain parts. Anyways, it says the finance ministry is also interested now.
Liquidity will come down in the derivative segment for sure ! It has already halved since 2010.(as per that article)
And I think brokers will be affected a lot. Their revenues will go down too much as derivatives is their main bread winner. I hope all brokers combine and say no to increase in contract size.
What do you have to say Mr Nitin Kamat ? I am curious to know your view.
Found an older post for your reference.
very bad move for retail participants. They have no right to do so, it should be left onto us to whether we participate or not. Those who have less money will be affected in a bad manner, on the other hand rich will not get affected. This happen each and every time, poor getting grinded whenever new policy comes out. This must stop.
SEBI is only for "Elites " SEBI is known for its blunders , this is another circular after ,circular about Extending stock market trading hours. Some lobby & vested interest in SEBI are always moving/ project cooking against retail traders / investors , it seems that SEBI wants to oust retail traders from the market .
This is really sad. Liquidity will be further hit. Steps should be taken to improve market participation, not something like this.
What will be Its Effect on market?
There will be a one more blow for Derivatives product on NSE , here is the link about https://www.bloombergquint.com/markets/2018/01/18/india-s-nse-is-said-to-seek-singapore-delay-on-stock-futures
Today in Business Line paper NSE is requesting SGX to delay its new product : Stock FUT trading. It clearly shows that NSE is suffering loss of business. If SEBI increases contract size further, it will hurt the exchanges even more. Even brokers to will get hit.
Besides increasing contract size has not brought about decrease in FnO *activity so far. So I dont understand why they will do the same thing again and expect a different result.
EDIT:*Decrease in turnover
If it happens, market will find it bottom immediately. All stocks may reach their real value. Then market will start again.
Retail investors who are unable to participate in derivative segment, will have no other option than cash market. So they may have to pay higher brokerage as usual for cash market. In the broker’s part, their brokerage income substantially come down initially, but not permanently.
Will this be applicable to currency derivatives as well?
How long will it take to enforce this decision?
Yesterday someone posted about, international trading account that allows us to trade in all stock exchanges in the world including NSE.
If sebi increases margin requirements or lot size, i am planning to switch to international trading. Brokerage cost and tax maybe a little higher.
Once sebi eases the burden on retailers we can use indian brokerage and trade in NSE
Hahahahahahaha. Man, seriously. Someone please tell him why I am laughing.
@Avi_Garg Bro, that is only after sebi bans retailers don’t misunderstand
If sebi restricts us based on income and keep raising the margin requirements
I don’t intend to make fun of anyone. Sorry if you felt bad. The point I am trying make is that there’s a problem with trading in international markets and that is well, it’s illegal. Rbi bans us from trading in markets internationally. So you can’t do that.
Is that true?
There is also a brokerage https://www.interactivebrokers.co.in/en/index.php?f=212&p=indiaSteps3
I dont know whether it is legal or not. I just found links while googling
I forgot to mention it’s derivatives that are illegal. You can still do equity in international markets
Only as Investment and not for a leveraged financial instrument or leveraged trading.
derivative trading must be banned totally…haha…these are weapons of mass destruction (WOMD)…
Thanks for the info bro. So retail traders have no option other than sebi and NSE