Nifty Future volumes shrinking fast, out of top 20 soon?

[bpr]

How to insert outside image in TJ??
Insert image se Link past kane se kuch dikhta nahi..

U have to add before and after IMG tag ...
but you are using the wrong link...

when u upload to imgur just hover on the image a black box will appear top right corner which has the actual share link .. u can even click the down arrow then "get share links" and get the bbccode link itself so that you don't have to add img tag ...

 

[headstrong007]

http://marketvoicestage.commonworkspace.com/sites/default/files/MARCH_2017_VOLUME_SURVEY.pdf

This report says there is reduction of 60% in nifty options volume compared to 2016 vs 2015 year
Similarly Nifty index futures volume fell by 62%
On the other hand BankNifty option volume has risen 150% so big thumbs up to weekly option I guess.

NSE Single stock futures volume fell by 32.9%
NSE Single stock options volume fell by 15%

If volume falls like this big danger to trader as they have to pay more in impact cost

aaisa to hona hi tha..
breakeven is gradually increasing in future due to volume shift to weekly options and huge taxes attach with future trading...bad for over all market health..

 

[headstrong007]

Raised the issue a long time here, opened the thread. As a high volume trader, I was gradually facing the liquidity crisis in Nifty & Bank Nifty future... wide bid-ask in last few years as volumes dried up slowly but steadily...

Finally... NSE-BSE realized the problem after a long time, when it is going out of their hand....

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India’s three stock exchanges jointly announced that they will stop sharing data with foreign peers to prevent volumes from moving overseas.
The decision will halt derivatives tied to Nifty 50 Index and S&P BSE Sensex and stocks on Singapore and Dubai stock exchanges.

The license with SGX to trade Nifty futures will get terminated (WITHIN 6 MONTH OF NOTICE), National Stock Exchange’s Managing Director and Chief Executive Officer Vikram Limaye told BloombergQuint in a phone interview. India’s largest exchange will issue the termination notice to end the contract in six months, he said. “We cannot disclose the details of the financial arrangement, but we have taken a broader call in the interest of consolidating the Indian markets.”

The decision comes after SGX started offering single-stock Nifty futures, that account for more than a third of the futures volumes on the NSE. Foreign portfolio investors use such contracts to hedge their exposure in the cash segment, and moving to Singapore reduces costs as contracts are dollar-denominated and offer tax advantage. That was the immediate concern of Indian bourses, including the Bombay Stock Exchange and the Metropolitan Stock Exchange.

It is observed that for various reasons the volumes in derivative trading based on Indian securities including indices have reached large proportions in some of the foreign jurisdictions, resulting in migration of liquidity from India, which is not in the best interest of Indian markets. -
Joint Statement By NSE, BSE and MSEI

https://www.bloombergquint.com/mark...-not-provide-market-data-to-foreign-exchanges

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Govt is not willing to cut the Transaction Tax, abolish STT, Stamp Duty etc. This is also not in hand of NSE-BSE-MSEI.
So Indian Exchanges finally did what best they can do for the best interest of Indian markets and to protect their earnings.

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Finally, The purpose of this thread is fulfilled.

 

[Tuna]

So 6 months life-line for SGX ?

 

[Raj232]

aaisa to hona hi tha..
breakeven is gradually increasing in future due to volume shift to weekly options and huge taxes attach with future trading...bad for over all market health..

From Global Indian market to Local Indian market:
with such high taxes, large traders preferred trading SGX in Singapore compared to BSE/NSE. In fact BSE derivatives market is almost zero if not zero.

 

[timepass]

An article posted elsewhere in the forum says that Singapore had 46% of nifty futures market last year !!!

 

[bpr]

by banning offshore they want to bring volume to the GIFT exchanges.

in GIFT

no STT, CTT
but 30% Short term capital gain tax.
but if you have physical presence in GIFT then you can pay 9% MAT instead.

Where as SGX , DGCX provide 0% tax without any physical presence nonsense

so no volume is coming to GIFT city thats for sure ......

 

[headstrong007]

So 6 months life-line for SGX ?

Yes, you are absolutely right.

 

[headstrong007]

An article posted elsewhere in the forum says that Singapore had 46% of nifty futures market last year !!!

Currently, as per last fry day record, SGX Nifty Future Oi from original site is much higher than NSE. I compare other Index Futures like mostly traded SGX FTSE China A50 Future they show volumes and oi in lots only.

As per NSE last Friday stats,
NSE nifty oi 22389150/75= 298522(in lots)
daily vol 212253(NSE show volumes in lots)
sgx nifty oi 397280(in lots ) daily vol 068379

Source:-
http://www.sgx.com/wps/portal/sgxweb/home/marketinfo/derivatives/delayed_prices/futures

So SGX nifty Oi overtaken NSE in a very short period of time!
Most of the participants in SGX are hedgers or swing traders. FPI-FII are hedging their Nifty Future Derivative position against Dollars fluctuation using SGX Nifty also.

SGX nifty Oi almost 33% higher than NSE.
So, out of that 133% volume on SGX something will surely come to India slowly.

Also, the greatest fear from Indian Stock Exchanges was FPI-FII will try to hedge their cash position in individual stocks with recently launched individual stock derivatives @SGX, hence more volume shift to SGX. So there were no other ways..

 

[headstrong007]

As a trader, I can only say that If someone is used to trading NIFY Future and profiting constantly for years, just bcoz of suddenly increased tax(like SGX stops) he/she can't stop trading on that instrument. Unfortunately, there are not many alternatives.
Also according to the report, FII-FPI was hedging their CASH positions in NSE-BSE using SGX. When there is no alternative, they have to come to Indian Exchanges.
But, no one is expecting the whole volume of SGX will come to India but surely some of these for sure.

**************
Another point of this thread was higher taxes, especially STT in future.
As long higher tax remains in future comparative to options. Volume shift to options will happen slowly but steadily.

I expect Govt will understand the negative impact of STT quickly as currently the whole trading is limited to Indian Exchages. So, no outsider is available now to blame.
All impacts will be clear in another 2-3 years.