Is This the End for the Weekly Options ? Find it now ! WeekendInvesting Daily Byte 28 June 2024
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Alok is the Founder of Weekend Investing. He has been in the Indian stock markets for almost three decades now and is passionate about building rule based - non discretionary momentum investing models to invest in the markets that can generate superior returns compared to benchmarks . His dream is to try to help others achieve Financial Independence early so that life can be lived to the full, like it has for him.
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It was bound to happen. It's a new thing and a lure of easy money. If 9/10 are losing money, the volume will taper off in some time. Besides, the govt is not at all concerned about retailers who practically gamble. If they were, they would have increased the lot sizes instead of decreasing them. That would have curbed the retail gamblers to some extent or at least reduced their exposure But no....they want the volumes for imposing additional taxes under the guise of concern for retailers.
yes!
This is the equivalent of banning shorts during 2008 and 2020. Forced socialism is pathetic and not a sign of free market behavior.
Market is a self correcting eco-system. Either the 89% figure has issues or the losers will leave the markets sooner or later. Volume beyond a point doesn't matter as many are scalping trades, and most of the positions get squared off intraday. Money generated in the capital markets (increase in mkt cap minus intermediary charges and taxes) get divided into cash and derivatives segments. This in turn flows back either in the capital markets or the other parts of the economy. So, anyone saying that cash segment is losing money at the expense of derivatives segment is wrong. Only issue is ethical or moral. From that yardstick cash segment intraday or short-term trading also needs scrutiny. Plus, SEBI is not chartered to pass moral judgment. That's for the parliament to decide. In summary, unless there's a systemic risk, there's no need to fix a nice working eco system.
Good points
Traders were pushed from equities to options due to increase of charges and taxes on equity trading. Its the regulators doing, now theyre objecting to the outcome. Ridiculous. Also, we're the most populous nation in the world, with probably the largest educated bunch, atleast the basics. We need to get used to the biggest and largest numbers in the world for everything!
Do you know we're both the top producer and the consumer of dairy in the world -so much so that we import cheese and milk powder! Nobody seems to have problems with the big numbers in other industries.
Also, its always the top 1-5% who really make it in any business. Whatre they gonna do next, ban UPSC and CA exams!?
good points
What should Govt do, if they are really interested in Retail category financial risk -
1) all indices should have single monthly expiry on last Thursday of each month
2) remove LTCG on equity and MF investment for individual PAN holders
3) stocks F &O - buying and selling of call, put, futures should be allowed only if the account is holding the underlying in demat in same proportion.
Dr Ambarish
I don't think it is wise on part of the Government to intervene. Right now, we are in a phase of boom in overall Equity market. Retail participation has not increased only in Options market, there is tandem increase in retail participation in stock holdings as well. Some people prefer stocks and some prefer options based on where they find themselves comfortable. This boom, as we all know, can continue for long enough but will not last for eternity. It would be interesting to see, when markets start to fall and go into consolidation phase for long time, as has been the case after every big correction, how the market liquidity (both in equity and options market) shapes up.
Further more, free market has its own way of eliminating the excesses whenever there has been some. It would be better for the Govt. to let the markets be and allow it to settle or balance of its own without worrying much about the retail. Retail in todays age of internet is mature enough to decide for themselves what they want to do and what not !
good points
Options are providing liquidity to the market. Gormint poking its nose it a horrible idea. And world is moving to a 0-DTE model now and we are trying to go back to stone age. How dumb can this get.
Sir, Increasing Margin is not the solution. The options turnover is high because retail is buying options and not selling the options.
Sir to get more returns you have to do options trading, even people like Vivek Bajaj sir support it for retailers but I don't like derivatives. I just wanted to know to you that derivatives who can do really well can bring much higher returns like 35 % cagr , if I do momentum investing in small and mid cap segment (like Mi20, Mi 35) then is it possible to get that level of return in a very long run like 10/15 years?😊
Yes
**Options** is more of course selling then trading to be honest.
I just went through the comments section..got very good points from both sides - supporting & opposing
Very educating
Shows educative serious market participants subscribing channel
Comment section is no less educating than video
Thanks for both
Thanks Sir
Good observation... SOmehow we are blessed with intelligent viewers !
To stop the weekly option is really the best way..And as you said the second way is to reduce the leverage.
I am using my 20 to 30% capital for option trading even then I feel that that this steps should be taken implemented
It will be wise for the regulator to terminate the weekly expiries and just have monthly expiry. Increasing taxation will not change anything in the system but for only the government to make extra money from people.
Yeah
Does that mean broking firms will see losses in revenue ? I think these broking firms are powerful enough to influence policy making against their profits. Anyways,, if it happens, it is only a good news for investors and traders alike ....in the long run
4G is not good for environment sir. WiFi should always be the way to go. I always use WiFi more than 4G because my phone gets better battery life that way as well
They should increase the barrier to entry, but exchanges are doing the opposite
1. Reducing lot sizes
2. Margin benefits if someone buy options in parallel
3. Leverage in FnO is 7-8x
4. More expiries
5. No restrictions on ppl giving bets on FnO
By just increasing the lot sizes back to 75 for Nifty from 25 currently will remove 50%+ retailers from the markets who are doing speculation
Yes
Based on the track record of the finance ministry they increase tax
If the margin for stocks and stocks derivatives is made low especially futures then people will move towards stocks derivates and this will reduce volume on index derivates and stocks driving the index derivatives is possible but curretly margin is high in stocks and with less price movement it is not appearing a financially attractive way to trade stock futures
This is a very good point. SEBI should look at eays to increase future volumes (remove STT, for example).
Govt will have to strike a thin balance keeping open market view point at larger sense and trying not to tilt it either way gradually defeating one side's interest
SEBI shall ask for suggestions
This is mental capacity, had it been in USA it would have been celebrated. it is happening in India so people are fearful. People are losing money in market since 100+ yrs regardless of countries. Problem what I can see is no gov had recommended the stocks or group of stocks in past. Modi did that mistake. Market has to correct as it is truth of market and now they are fearful and want to control the market at some extent.
Ok
Alok sir, Does increasing global fuel prices affects indian small cap & Mid cap Stocks? And shall we start hedging our portfolio with gold as you discussed in the video of trump comes in power fuel prices may go up.
EQ gets impacted eventually as rising fuel caused inflation causing rates to rise
just remove daily expiries....everything will settle down
Ya
Need to remove daily expires which are causing lot of problems. There should be some limiitation for high frequency trades losing both option buyers and sellers. Techicals are not working in the market.
Correct
Can someone tell from where sir gets the SECTORAL daily weekly n monthly data? Site name?
Nse
Sir have shorted nifty sold futures july and august at 22900 and in huge loss..are markets going to correct sir
For your sake let's hope so. But always keep some stops
Never book profits in Mutual Funds unless you need the money for medical reasons, buying a house or marriage. LTCG is 10% and the market is unlikely to give you a chance to enter at lower levels except some drastic case.
Good advise
Encouraging LT Eq investing with measures like reducing or removing LT tax STCG may help maybe
unlikely now
@@AlokJain seems so 👍
99% retail traders of options and futures contract have vowed to becomed street side beggars. Everybody wants to become rich overnight with tiny size of capital. Nobody can save them unless the derivatives windows are shut to retail traders
Yes
Derivatives are used for hedgeing any stock position how can the sebi think of removing it at all? Besides 10% are still making money i think sebi is not liking that 10% are making that chunk as retail traders are giving tough competition to prop firm that is why they have some pain...
We will find out soon
Divide no of options by population and then compare with US
Divide by no of mkt participants is the right metric
Government should make such policies so more and more people move from F&O to stocks or Mutual Funds
yup
If we lead in something, we should develop it more rather than suppressing. Las Vegas does earn money for US - It has its place of its own. Markets do saturate and mature if nicely Developed and regulated
SEBI's main job is to ensure 90% people loose money consistently to rest 10%, so they make policies accordingly..😁
Sir, please have a talk on. Can an investor take leverage bets if he has researched and keeping the downside covered? Should anyone do this? Please reply
Using futures not options
Yes why not. If you know the downside and have planned for it , why not
HFT people might be having sleepless nights and it is a good thing. UNreal market manipulation, makes the market extremely choppy!
17:21 i agree. But, the same derivative vs base skew is found in gold and silver, particularly in US. No one is commenting on it....
What the purpose of using 40 period MA? Is der any calculation as per u? Kindly explain pls.
Thanks in advance.
Nope. It is nearest to 200 DMA
They should cancel Vivek Bajaj 's licences and he should be barred from trading, for misleading youngsters into believing one can make money from FNO and there is no use to have a study based fundamental investment strategy
Pls be kind to all.. he also educates on many good instruments.
Tail wagging the dog 😂😂very good line 😁😁👌💯
haha
@@AlokJain 😁
To be eligible for options trading including buying, a minimum basic margin like 25L shoul be enforced.
Yes
Mostly people even don't know time value and what is expiry and they are trading im option i see such people waste lakhs of rupees he doesn't know that today is expiry
yup
Sir please make a video on exit strategy. When not to take further fresh positions. So that we can survive even in a crash like 2020 and 2008
Have done many in the past... will do again soon
Sir, Majority of retailers buy options, so how can they increase margins in option buying ?
You cannot know till we know !!
But sir we are using option very safely and understand risk management then trade
regulator does not think so
What is wrong with Reliance raising price is that , they destroyed the competition . If there was a fair competition then no issues with rising prices ..
The competition commission must be looking at that
@@AlokJain😂😂😂
Thank you sir 🙏
Most welcome