SEBI's new move to cut retailers participation in F&O!

[vikas2131]

My worry is SEBI may say no F & O trading if one is not atleast filing Income Tax Returns...it is possible as Govt wants to increase taxpayers or atleast people filing IT returns. This will put all small traders out of the market and liquidity will take a beating.. Hope that does not come..
But I wont call it unreasonable restriction put by SEBI and Govt. Govt also is thinking of limiting exposure based on income.

So guys, in the remaining months trade well, make money and file your IT returns and pay your taxes. Anyone will find it difficult to accept that a guy who does not earn Rs 2,50,000 on gross level in a year but takes a single trade exposure of over 7.5 L to 10 L

ST

Any serious restriction will lead to serious crisis of liquidity from which it may be very hard to recover.

 

[cinderblock]

The trade value may be 10 lakhs, but the exposure is limited to 5-10 thousands. If SEBI wants to limit the leverage, ok. .

Of late, since BN expiry every week, a lot of retail buy cheap options every Thursday. Their exposure is certainly not 10L. Maybe a few 100.

I am not sure what Sebi means when they say retail FNO exposure has gone up. If they think it's 10L, every Thursday, then certainly the retail exposure has increased since BN weekly expiry. But has it really?

 

[vikas2131]

The trade value may be 10 lakhs, but the exposure is limited to 5-10 thousands. If SEBI wants to limit the leverage, ok. But it just does not sound right to now allow participation. The brokers already have RMS teams which square off your trades if your losses reach a certain %age of the account value.

Let the guidelines come out, then we will see if SEBI's bark is worse than its bite or not. I personally think that babysitting a trader smacks of government jackboots.

I also feel they will force most retailers to buy side in options which pretty limits the risks right away. NO future and no selling of options for retailers.

 

[vikas2131]

Of late, since BN expiry every week, a lot of retail buy cheap options every Thursday. Their exposure is certainly not 10L. Maybe a few 100.

I am not sure what Sebi means when they say retail exposure has gone up. If they think it's 10L, every Thursday, then certainly the retail exposure has increased since BN weekly expiry. But has it really?

That is nominal value..doubt that they will calculate exposure that way other wise 50 lakhs would not enough to trade.

 

[cinderblock]

That is nominal value..doubt that they will calculate exposure that way other wise 50 lakhs would not enough to trade.

What I am trying to say is even on the NSE website, there is no data which tells you the "actual" turnover. It's all based on the strike price and that's the only turnover data you have.

So if someone's looking at the turnover data, the retail exposure since weekly BN expiry must have increased exponentially and optically it seems the retail is over-leveraging. But that's not really the case.

 

[vikas2131]

Of late, since BN expiry every week, a lot of retail buy cheap options every Thursday. Their exposure is certainly not 10L. Maybe a few 100.

I am not sure what Sebi means when they say retail FNO exposure has gone up. If they think it's 10L, every Thursday, then certainly the retail exposure has increased since BN weekly expiry. But has it really?

They are talking about intraday leverage where some brokers are providing as high as 25 times

 

[afin]

They are talking about intraday leverage where some brokers are providing as high as 25 times

x

 

[TraderRavi]

What I am trying to say is even on the NSE website, there is no data which tells you the "actual" turnover. It's all based on the strike price and that's the only turnover data you have.

So if someone's looking at the turnover data, the retail exposure since weekly BN expiry must have increased exponentially and optically it seems the retail is over-leveraging. But that's not really the case.

if you have read the sebi document they discussed this issue of option turnover and they have both data by premium wise turnover and by notional value .

 

[vikas2131]

if you have read the sebi document they discussed this issue of option turnover and they have both data by premium wise turnover and by notional value .

what did they actually say about options ? how do they plan to calculate the exposure by premium or by nominal value ?

 

[vikas2131]

x

This will stop.. cant blame them for this though..