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

[afin]

They must introduce mini contracts. Thats the way it hs to unfold. They can't put a total blanket ban on all f&o for the retailers.

 

[Vitthala]

@niftytaurus you summerised it very well.

as @Smart_trade Dada said above about product suitability,yes this is it..

They want to keep clean F&O area where only FII/DII and HNI could take active participation because small traders though provide a liquidity are actually being considered as a Noise Traders on the platform.

So instead of doing business in F&O,they want us to move to Cash Market.Many traders are doing some job(Govt or non-Govt) or possess some business so obviously they have filed some ITR.
A person with just 50,000rs in hand cant be considered as full time trader,right?

So regulators wants us that-instead of buying a contract whose lot size is 4000,buy 400 shares in EQ Cash...Play Safe,Be Safe

 

[Pradeep Narayan]

Someone please clarify if my doubt on Networth:
In the absence of any assets or liabilities, will a person's networth equal the income shown in tax return?
@canikhil please explain.

 

[Vitthala]

They must introduce mini contracts. Thats the way it hs to unfold. They can't put a total blanket ban on all f&o for the retailers.

they increased contract value from 2L to 5L i.e,they increased lot size in past
if they really want to protect investors then they'd have decreased the lot size,right?

so,its going to be very tough

 

[NJ78]

They must introduce mini contracts. Thats the way it hs to unfold. They can't put a total blanket ban on all f&o for the retailers.

There used to be Mini Nifty contracts till 2013 when it was discontinued. I think the only way for retail traders to buy more time is to try trading in MCX which has more product variety (mini/mega) and also try out CDS where the margins are low. With the regulator's focus on destroying F&O, there might be more time till they turn their attention to commodities & currencies.

 

[afin]

hi
I have gone through all the posts & views from fellow traders..If we have gone through Vitthal's bro post, which is put light that whats is in SEBI'S MIND??..WE can get some idea..
a) they will increase lot size to double..so 1 lot approximate is 10 lacs -15 lacs..FOR EX. IF I show 15 lacs Rs networth, I can not buy single lot..I have to show atleast 20-30 lacs networth to trade a single lot..Means even rich trader who can show 1 crore of networth are not able to take more than 4-5 lots
b) traders who can not show NETWORTH more than 20 -30 lacs, can not trade F& O at all..
c) traders who can show networth below 20-30 lacs, can trade in CASH MARKET...but here also they can take exposure of 50% of networth..means if they show 20 lacs networth , they can take exposure of 10 lacs rs .I.e they show Networth & take 50 % exposure of that
d) traders who can not show networth certificate, they have to show ITR return of Previous years..ex. if they show rs 5 lacs ITR, they can take exposure of 2.5 lacs Rs ONLY in CASH market.
6)Traders who cannot produce Networth & ITR , can not trade at all in any market whether cash or F& O..Even if they have capital to trade

7) most of the retail traders will be out of the market after this ..This will be a serious LIquidity crunch after that..EVEN 1 CRORE net worth trader is allowed to trade 4-5 lots ..Even if he is allowed , how will he trade in that iliquid market.
8) Tv channel is just silent about it..because they dont want to spread this news...when SEBI officially announce , channel will create panic & there will be a severe panic & market will fell drastically ..so Sit on cash is a good idea...
9) This will be a very dramatic & unfortunate change in History of indian stock market..this will a very big move/bend on share market.
10) if same thing happended what happened in South Korea market, our markets will go in deep hybernation...this will be a sleeping market..
11) In that uncertain condition, its very difficult to trade in that situation..I CAN NOT CONCENTRATE on Trading RIGHT NOW...How can somebody trade for 1-2 monthes , when you know you are going from out of business in 1 & half month..
12) If this will not happen in cOMMODITY , & we hope that we have still 6 monthes in Commodity..so we can trade Crude in this time ...but yaha bhi aapkey sir par talwaar latak rahi hai, to tension key sath trade nahi kar saktey..
Its very depressin time for any trader...till then this dust settles down, we can trade in peace..
I am not tradin now a days, & waiting for that official circular ..& how will it effect everybody's trading..
Thanks

Bhai, trading is 90% psychology and you can't afgord to lose your biggest weapon at the time it's needed the most.

I know it's easier said than done but don't become pessimistic. It will only mess with your head even more. Acknowledge that there's nothing you can do about it and be prepared for it. That way you are reducing the uncertainty of the mind and wil be better able to focus on the now.

Try mindfulness meditation. It has helped me immensely and am sure it will help you as well.

 

[TraderGYO]

1)attach networth to trade F&O
2)attach ITR to trade Equity cash market
3)lot size of Relinfra Fut is 1300,it will be 2550
4)my broker will decide how much quantity I could buy based on my ITR to trade Equity Cash market.
Margin will be blocked beyond the limit.
5)Compulsive audit-if you lost trading file loss ITR,if you made money declare the income and pay the tax
else mini Scrutiny

point 5th,financial year hone ke baad
IT dept will send you notice based on your AIR irrespective of your turnover.
You traded the stock market,now you have to show it in ITR anyhow.
So far traders used to skip filling ITR if income was nominal

For those who are students and do not have a job yet, can they use net worth certificate to trade the equities market ? Earlier I thought it is going to be either net worth or ITRs.

 

[niftytaurus]

Someone please clarify if my doubt on Networth:
In the absence of any assets or liabilities, will a person's networth equal the income shown in tax return?
@canikhil please explain.

Hi
Nothing is clear now..but If we assume ,If you dont have Networth certificate,you can show ITR return..Your exposure will be in cash market according to your ITR.
thanks

 

[Pradeep Narayan]

Hi
Nothing is clear now..but If we assume ,If you dont have Networth certificate,you can show ITR return..Your exposure will be in cash market according to your ITR.
thanks

Hypothetical:
In case I have a taxable income of 15L and no assets or liabilities, won't I be not allowed F&O, atleast I can buy options worth 1 Lakh which is 1/15th my income & my risk is limited + I don't have any exposure based on leverage.

This is why I asked the question earlier, may be a CA would help clarify things.

 

[niftytaurus]

For those who are students and do not have a job yet, can they use net worth certificate to trade the equities market ? Earlier I thought it is going to be either net worth or ITRs.

hi
YES ! They can use Networth Certificate, If they have..You are right..it can be either IT return or Networth.
People who can show networth of 20-30 lacs rs are only allowed to trade F& O..less networth people can trade in cash markets..& who doesnt have Networth , can produce IT RETURN & Can trade in cash market & take exposure according to your ITR.
NOTHING IS CLEAR yet..but we all are just assuming as our knowledge..so nothing is sure yet..
Thanks