Comment on Intraday leverages reduced across the board

Lokesh Kumar commented on 04 Jan 2020, 06:15 PM

This is a wonderful decision was SEBI. SEBI is not a fool institution. It is serving in the interest of market.

1. Speculation will be reduced significantly. Market has off late become a gambling paradise. Market is not for this. Markets are supposed to be efficient and in a market where 88% money is involved in options trading manipulation rules the roost. Everyday people take leverage and close positions from 3 to 3.25 PM. It was very easy to predict who are struck and the market used to run significantly without any reason. Check 3 Jan 2020 Nifty movement from 3 PM.

2. Retailers are very less in option selling. Most retailers are option buyers and losing their shirts by leveraging their positions. Since the introduction of weekly options, option sellers have been controlling Banknifty and NIFTY movement by controlling a few stocks and moving positions in their favour.
The rich are becoming richer and the poor poorer.

3. The speculative volume will go down and if one understands market the more you trade the more you lose. Brokerage firms are at a significant disadvantage owing to this decision. ITR department has reported significant boost in profits are weekly options introduction for option selling firms and brokerages. The question is who lost that money. SEBI is trying to protect them.

4. Option sellers will always be the king and they will always rule the market. The only thing is that those who used to deflate the prices by selling will get reduced significantly. It may lead to increased bid ask spread increased options prices and brokerage firms increasing their brokerages but it will only discourage option buyers from plunging at exbortitant cost. Markets are not for intraday speculation and it is better to curb it. Retailers are not getting richer by intraday trading and it is better to keep them away from option trading.

5. Option sellers if they know that they can make money by option selling will still arrange the money even if it is 100 times because they know that this is the winning side. Option buyers have always been doing that losing and arranging more money. Intraday option selling for retailers would come down significantly. People like PR Sundar, Mitesh Engineer, Jegan, Manish and so on who are not even SEBI registered professionals have been conducting workshops and minting money by selling huge chunks of options. Their profits will be hit significantly.

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