Comment on Intraday leverages reduced across the board

Guest commented on 03 Jan 2020, 06:53 PM

I know one broker – famous for high leverage reduced leverage from 40X to 10X today for cash today.
By the way 12.5% means 100 by 12.5 = 8X leverage for Zerodha in cash (equity intraday).
I think eventually all brokers have to stop intraday leverage for Cash.

Still, today many brokers are providing Derivative Intraday Leverage. So, probably we have to wait further to know intraday leverage of future and option selling. If intraday future leverage is gone then option selling intraday leverage also which will effect the option liquidity more than future. IMO.
Wider spread in stock option will kill the stock option market for sure. Already there is less liquidity in stock options.
Anyway this is completely wrong move, as no world market (any country) have stopped intraday product (with high leverage).
Hedging will be very tough for big investors during market crash as future trading will require full (very high) margin as NRML.
Also short covering will be less due to less volume/liquidity. Market will loose momentum during up move in absence of enough wrong side short covering.
Also market will find it difficult to take support during big crash (due to less short covering -profit booking from shorts at new low).
Market structure will be damaged without liquidity in future market.

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