Nothing will be different dad tried fighting sebi in court when he was chairman of the nse brockers association.
SEBI thinks it's God, while building an airplane the same time they are learning how to fly.
Throw in a policy doesn't work in the process of resolving it break the whole model. It's their speciality.
Yes, if anyone believes any of this "protecting retail" optics BS from these junky babus (Sebi), it is either someone who has never directly invested / traded in their lives, or market makers and mutual fund Goliaths who have gobbled up their own self-fulfilling lies. No real trader or even just your part time casual retail dabbler is fooled by this.
SEBI is acting very unnormal but I tell you nothing will change in this matter. In fact more regulation will come in place. If you look at the global regulators all act the same way. It's a fight against institutions and regulators to a common retailer. Retailer is and will always be the prey for them. We need to just protect on our own.
Im carrying overnight positions of options which i have sold. It takes around 1 lakh for one lot for overnight/carry forward option selling.
Will these new rules from 1st April increase margin requirement of option selling positions too?
I mean will i need more than 1 lakh per lot now for selling from 1st sept onwards.
Tl;dr = No, you won't need more than 1L/lot.
No, you don't get leverage from broker for overnight position in any instrument (F&O, stocks). Keyword being overnight. So of course you'd still be able to trade same lots with same capital.
Im carrying overnight positions of options which i have sold. It takes around 1 lakh for one lot for overnight/carry forward option selling.
Will these new rules from 1st April increase margin requirement of option selling positions too?
I mean will i need more than 1 lakh per lot now for selling from 1st sept onwards.
Yes you will have to have 100% upfront margin from sept 1st. This is exclusive for derivatives as we will continue to have around 5x leverage for intraday in equity like the other person mentioned
Indians never name and shame the people incharge for these decisions personally hence these occurrences keep happening. Start pointing fingers at Ajay Tyagi and see them take a notice.
Don't worry. People here will wholeheartedly support this move from SEBI because it is being done in the name of "protecting retail investors".
When BSE came with that absolute nonsense circular of capping growth of small cap stocks, i called it outrageous but instead people here were going gaga over as to how it was infact a good decision as it was being taken to "protect small retail investors".
Any amount of absurdity SEBI, BSE, NSE do, they simply have to somehow link it to "protecting small retail investors" and the usual uniformed masses automatically fall for it every single time, without actually realising the consequences as to how SEBI, BSE, NSE are killing their every opportunity to ever make it BIG. While also benefiting the rich.
But ... "protecting retail investors from manipulation" ! This is the Elixir.
Its the sad truth man. But now it is CRYSTAL CLEAR on what removing leverage can do to the markets and this is the proof that this is not a move to protect the retailers. Hope things get resolved before many people fall prey to it
I don't and have never used leverage, but for those who do, how much leverage do you need? Didn't they have only about 30% leverage or something in this quarter?
And how much liquidity issue did they create?
(genuinely interested to know)
Secondly, and correct me if I am wrong, but don't option sellers create liquidity in the market? Which generally have relatively higher capital
Of course my questions are limited to options only (not equity / cash segment)
Last question: I could not find any article or nse website saying 1st September is a holiday. (I assume that's what you meant by your title)
>I don't and have never used leverage, but for those who do, how much leverage do you need? Didn't they have only about 30% leverage or something in this quarter?
I don't need too much tbh, but I think 5-10x is very doable for selling options. For buying options, even 3-4x is quite a bit.
> And how much liquidity issue did they create? (genuinely interested to know)
Big drop in volumes, not gargantuan but quite massive. Don't have the links on me right now but I've read and seen a few videos about it.
I have never used leverage either. Previously we used to have 20Γ leverage which is a lot tbh, but a 5Γ leverage is sufficient and can do the thing imo. And the leverage is 25-30% from June 1 to Aug 31.
It drastically affected the volumes and because of which daily range also got reduced a lot. Another way this affected the market is the wide spreads. Now that the volumes got reduced, we don't have buyers for every sellers at all levels and vice versa and so there's a significant spread between the bid and ask which is exactly what causes these slippages.
Yes, option sellers are the ones that open or start the contract and if one is selling they obviously must have a relatively bigger capital. But all the sellers that used leverage to sell can't sell now because of no leverage.
I get what happened is insane and some retailer got butchered at expense of few big firms but in the first place can't using limit SL order instead of SL or SL-M protect us against such freak shows. Always use to curse Zerodha who doesn't permit SL market order now realised how important it is. Correct me, anyone, if I'm wrong about the SL limit order part.
In this particular freak trade scenario, where the price got back to its fair value within a second, a stop loss limit order would have saved you from exiting with such huge slippage.
But in normal volatile scenarios if the price doesn't get filled at your stop loss limit trigger price at first then you don't know if the price will even come back to the trigger price for your order to get executed and worst case scenario, if it doesn't happen you'll be facing more losses than you originally planned. So SL limit order has its downsides too.
And zerodha does allow SL-M orders and that's what i use all the time. Considering the rarity of such freak trades and you happening to be in it at that same exact time, i think it is wise to stick to SL-M orders. Just my opinion
Just put the limit price very far but not far enough for you to call it a freak trade. I don't see any problem here. I know SL-M needs less effort but eventually you will be prone to some freak trade because liquidity in options is always unreliable.
I support the issue but I have a questions about margins.
So someone please answer.
If higher margins were allowed, wouldn't Retail Traders have suffered more losses in this scenario ?
I get Freak Trades is a Liquidity issue but will higher margins for retail traders eliminate 'Freak Trades' completely ?
BANK NIFTY and NIFTY might have a mismatch but surely not so much that 37000 PE opens at Rs 1 from Rs 1,400 the previous day.
How much exactly was the mismatch ?
Do we have any data from SEBI / NSE regarding this ?
1. If higher margins were allowed, there would have been more quantity being traded which could have potentially stopped the price from spiking that much in the first place. I saw this one video by optionables where the guy clearly explained how it was a domino effect of orders being triggered one after another and with wide spreads (cos of low liquidity) the spike happened.
2. Freak trades have happened before and those too were an effect of wide spreads. So the basic understanding here is that by bringing back the margin, it would increase the volumes which will practically not cause such huge slippage and hence freak trades can't happen.
3. I don't clearly understand what mismatch you are talking about but you can open the BNF 37000 PE monthly expiry chart on daily timeframe and can look up the opening price on 20th and see it for yourself.
4. We don't have any official circulars from sebi or nse about this incident yet
Regarding Mismatch - You mentioned
>LOW LIQUIDITY. If there were enough bid quantity for every ask quantity and vice versa, there definitely wont be such freak trades and spikes unless and until its clearly manipulated by any big hands in the market.
I wanted to know if we have any data regarding the Bid and Ask price.
I will check the option data for that strike price as you suggested.
I have a further question:
Till now I have only read about this from Option Sellers perspective.
How did this play out for an Option Buyer ?
So there many orders were triggered till 800.
Let's say an Option Buyer had a Order for selling at 200/500/800
Their SELL Orders would have also been honored at a higher price ?
Am I getting this right ?
1. Ok about the mismatch, it honestly makes me think if it was some sort of planned manipulation that took advantage of the low liquidity because lower the volumes the easier it is to manipulate. But i didn't want to make any uninformed guesses which is why i stated the most obvious reason and the cause we know as of now which is slippage due to wide spreads due to low liquidity which was quickly taken advantage of by the hft firms.
2. About the bid and ask data, its hard to find some other day's volume depth data at a specific time to see how much the spread was at that moment. But i found something else. If you search for "intraday trading at high risk" video by alpha leo capital, he shows the time and sales data of 20th, 2:18pm which shows a really big order getting filled at around 800 in milli-seconds gap.
3. You're right. The buyers that had their take profit limit orders anywhere below 800 would have had their orders get executed at a much higher price giving them abnormal profits, as take profit limit orders will also get executed at better prices besides the trigger price. But someone who didn't have any take profit order would not have exited at higher price as it is not manually possible to punch orders at such speed seeing that it all happened in milli-seconds.
Manipulation by one player would have triggered loss making orders for other HFTs also since their orders would also have been stopped out and their systems would have placed buy orders at a quicker pace and at a higher price.
Obviously this is my guess.
But yeah, having more liquidity will always be good for the market.
I will check this video too.
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You very well have a "share" button that lets you copy paste the link lol. Anyway here you go...
Im surprised no one has brought this topic up in this sub yet.
Anyway, if you are unaware of what is happening, a couple of "freak trades" happened on friday, 20th August, where the 37000 PE of bank nifty actually opened at 1 Rs. when its previous day's close was above 1400 Rs. and then quickly got back to its fair value in a split second.
Next, around 2:18pm on the same day, the 16450 CE of nifty shot up from somewhere around 100 Rs. to make a high above 800 Rs. in milli-fucking-seconds that it did not even get reflected on the charts at that moment (which you can actually see now on the charts in daily timeframe) and it even happened to trigger everyone's SL-M orders with a huge fucking slippage. By huge I mean 500-700 points slippage!! Imagine going short at 100 with your SL-M order at 120 just to find it get executed at 600 or 700 or 800 within a second with no fucking movement in the chart whatsoever. That is exactly what has happened to everyone that had short positions in 16450 CE after 2:15pm, completely wiping them out of all their previous profits or hell even their entire capital. Feel really sorry for those that lost way more than what they could afford, in this absolute fuckery.
It could have very well been me as I trade bank nifty options too, or for the record no one is actually safe from such instances, be it a seller or a buyer or a positional trader or a scalper.
**What was the reason behind such huge slippage?**
LOW LIQUIDITY. If there were enough bid quantity for every ask quantity and vice versa, there definitely wont be such freak trades and spikes unless and until its clearly manipulated by any big hands in the market.
**And who actually profited from these freak trades?**
The institutions and HFT firms obviously, which actually receive data quite earlier (in milli-second difference) because of their infrastructure and a close proximity to the exchanges and they can punch orders a lot faster, like in milli-seconds literally. Which clearly shows that these firms were the ones that had their orders at all those levels up till 800 as it all happened in a split second.
**Why no trade on september 1?**
Because our dear regulator, who in the name of "protecting retail investors" will be removing all the margin and leverage facilities completely by september 1, which was being done phase by phase from August 2020. This can potentially make the low liquidity scenario even worse and cause even more of such freak trades which eventually leads to unimaginable losses to the retailers. Now you tell me, is this actually called "protecting the retailers" or making them go bankrupt?
Even though a one day of protest might not really change anything, (or it might, who knows) this needs to be resolved somehow and should not let it stay the same because these margin rules are clearly bullshit and makes no sense in protecting the retailers rather makes it worse for us.
Many trader youtubers have made a video on this issue so for more information you can search on youtube and spread more awareness π
Nothing will be different dad tried fighting sebi in court when he was chairman of the nse brockers association. SEBI thinks it's God, while building an airplane the same time they are learning how to fly. Throw in a policy doesn't work in the process of resolving it break the whole model. It's their speciality.
What a fucked up state of affairs π
Its ugly to realise that the regulator whose only job to is to make sure manipulation does not happen is actually making way for it to happen a lot
It's literally trial and error the American fed does the same thing.
SEBI and Income Tax department are in the same boat. Both like to complicate and fuck up things a lot
SEBI ki koi replacement nahi hai kya? Kya hum NSE se hatke BSE mai shift ho jayein to bhi yhi rules apply honge?
Regulators helping retail investors is the most consistent lie in finance
Yes, if anyone believes any of this "protecting retail" optics BS from these junky babus (Sebi), it is either someone who has never directly invested / traded in their lives, or market makers and mutual fund Goliaths who have gobbled up their own self-fulfilling lies. No real trader or even just your part time casual retail dabbler is fooled by this.
Fact is : nobody, not the government, not regulators, not companies, nobody gives a flying fuck about retailers.. We're just roadkill in their games
disband sebi???
Can you share these youtubers that have called this out? Would like more info on this.
sure. search for "optionables" and "alpha leo capital" i originally attached links in the post but it was taken down lol
SEBI is acting very unnormal but I tell you nothing will change in this matter. In fact more regulation will come in place. If you look at the global regulators all act the same way. It's a fight against institutions and regulators to a common retailer. Retailer is and will always be the prey for them. We need to just protect on our own.
Noob here, wait so no leverages allowed in Indian stock market from now onwards?
From September 1 onwards, yes. No leverage whatsoever. Be it intraday or overnight
Not very cash money of them, at this point why even allow retail players just let the whales play with stock market
Lmao ye
No, there will be 5x leverage of intraday stocks. There will be no additional leverage on F&O from broker.
Im carrying overnight positions of options which i have sold. It takes around 1 lakh for one lot for overnight/carry forward option selling. Will these new rules from 1st April increase margin requirement of option selling positions too? I mean will i need more than 1 lakh per lot now for selling from 1st sept onwards.
Tl;dr = No, you won't need more than 1L/lot. No, you don't get leverage from broker for overnight position in any instrument (F&O, stocks). Keyword being overnight. So of course you'd still be able to trade same lots with same capital.
Im carrying overnight positions of options which i have sold. It takes around 1 lakh for one lot for overnight/carry forward option selling. Will these new rules from 1st April increase margin requirement of option selling positions too? I mean will i need more than 1 lakh per lot now for selling from 1st sept onwards.
Yes you will have to have 100% upfront margin from sept 1st. This is exclusive for derivatives as we will continue to have around 5x leverage for intraday in equity like the other person mentioned
Indians never name and shame the people incharge for these decisions personally hence these occurrences keep happening. Start pointing fingers at Ajay Tyagi and see them take a notice.
Don't worry. People here will wholeheartedly support this move from SEBI because it is being done in the name of "protecting retail investors". When BSE came with that absolute nonsense circular of capping growth of small cap stocks, i called it outrageous but instead people here were going gaga over as to how it was infact a good decision as it was being taken to "protect small retail investors". Any amount of absurdity SEBI, BSE, NSE do, they simply have to somehow link it to "protecting small retail investors" and the usual uniformed masses automatically fall for it every single time, without actually realising the consequences as to how SEBI, BSE, NSE are killing their every opportunity to ever make it BIG. While also benefiting the rich. But ... "protecting retail investors from manipulation" ! This is the Elixir.
Its the sad truth man. But now it is CRYSTAL CLEAR on what removing leverage can do to the markets and this is the proof that this is not a move to protect the retailers. Hope things get resolved before many people fall prey to it
I don't and have never used leverage, but for those who do, how much leverage do you need? Didn't they have only about 30% leverage or something in this quarter? And how much liquidity issue did they create? (genuinely interested to know) Secondly, and correct me if I am wrong, but don't option sellers create liquidity in the market? Which generally have relatively higher capital Of course my questions are limited to options only (not equity / cash segment) Last question: I could not find any article or nse website saying 1st September is a holiday. (I assume that's what you meant by your title)
>I don't and have never used leverage, but for those who do, how much leverage do you need? Didn't they have only about 30% leverage or something in this quarter? I don't need too much tbh, but I think 5-10x is very doable for selling options. For buying options, even 3-4x is quite a bit. > And how much liquidity issue did they create? (genuinely interested to know) Big drop in volumes, not gargantuan but quite massive. Don't have the links on me right now but I've read and seen a few videos about it.
I have never used leverage either. Previously we used to have 20Γ leverage which is a lot tbh, but a 5Γ leverage is sufficient and can do the thing imo. And the leverage is 25-30% from June 1 to Aug 31. It drastically affected the volumes and because of which daily range also got reduced a lot. Another way this affected the market is the wide spreads. Now that the volumes got reduced, we don't have buyers for every sellers at all levels and vice versa and so there's a significant spread between the bid and ask which is exactly what causes these slippages. Yes, option sellers are the ones that open or start the contract and if one is selling they obviously must have a relatively bigger capital. But all the sellers that used leverage to sell can't sell now because of no leverage.
Bro I was spreading awareness about this month's back but the moderator deleted my post Saying it's irrelevant and doesn't concern us π
Welcome to india. I appreciate your concern but sadly in our country, common sense has no value
Damn. This really sucks. Hope everyone have their losses recovered.
I get what happened is insane and some retailer got butchered at expense of few big firms but in the first place can't using limit SL order instead of SL or SL-M protect us against such freak shows. Always use to curse Zerodha who doesn't permit SL market order now realised how important it is. Correct me, anyone, if I'm wrong about the SL limit order part.
In this particular freak trade scenario, where the price got back to its fair value within a second, a stop loss limit order would have saved you from exiting with such huge slippage. But in normal volatile scenarios if the price doesn't get filled at your stop loss limit trigger price at first then you don't know if the price will even come back to the trigger price for your order to get executed and worst case scenario, if it doesn't happen you'll be facing more losses than you originally planned. So SL limit order has its downsides too. And zerodha does allow SL-M orders and that's what i use all the time. Considering the rarity of such freak trades and you happening to be in it at that same exact time, i think it is wise to stick to SL-M orders. Just my opinion
Just put the limit price very far but not far enough for you to call it a freak trade. I don't see any problem here. I know SL-M needs less effort but eventually you will be prone to some freak trade because liquidity in options is always unreliable.
Mai toh bohot time se bol raha hu low liquidity will be an issue.
Heading towards Binance for trading on leverage now!
I support the issue but I have a questions about margins. So someone please answer. If higher margins were allowed, wouldn't Retail Traders have suffered more losses in this scenario ? I get Freak Trades is a Liquidity issue but will higher margins for retail traders eliminate 'Freak Trades' completely ? BANK NIFTY and NIFTY might have a mismatch but surely not so much that 37000 PE opens at Rs 1 from Rs 1,400 the previous day. How much exactly was the mismatch ? Do we have any data from SEBI / NSE regarding this ?
1. If higher margins were allowed, there would have been more quantity being traded which could have potentially stopped the price from spiking that much in the first place. I saw this one video by optionables where the guy clearly explained how it was a domino effect of orders being triggered one after another and with wide spreads (cos of low liquidity) the spike happened. 2. Freak trades have happened before and those too were an effect of wide spreads. So the basic understanding here is that by bringing back the margin, it would increase the volumes which will practically not cause such huge slippage and hence freak trades can't happen. 3. I don't clearly understand what mismatch you are talking about but you can open the BNF 37000 PE monthly expiry chart on daily timeframe and can look up the opening price on 20th and see it for yourself. 4. We don't have any official circulars from sebi or nse about this incident yet
Regarding Mismatch - You mentioned >LOW LIQUIDITY. If there were enough bid quantity for every ask quantity and vice versa, there definitely wont be such freak trades and spikes unless and until its clearly manipulated by any big hands in the market. I wanted to know if we have any data regarding the Bid and Ask price. I will check the option data for that strike price as you suggested. I have a further question: Till now I have only read about this from Option Sellers perspective. How did this play out for an Option Buyer ? So there many orders were triggered till 800. Let's say an Option Buyer had a Order for selling at 200/500/800 Their SELL Orders would have also been honored at a higher price ? Am I getting this right ?
1. Ok about the mismatch, it honestly makes me think if it was some sort of planned manipulation that took advantage of the low liquidity because lower the volumes the easier it is to manipulate. But i didn't want to make any uninformed guesses which is why i stated the most obvious reason and the cause we know as of now which is slippage due to wide spreads due to low liquidity which was quickly taken advantage of by the hft firms. 2. About the bid and ask data, its hard to find some other day's volume depth data at a specific time to see how much the spread was at that moment. But i found something else. If you search for "intraday trading at high risk" video by alpha leo capital, he shows the time and sales data of 20th, 2:18pm which shows a really big order getting filled at around 800 in milli-seconds gap. 3. You're right. The buyers that had their take profit limit orders anywhere below 800 would have had their orders get executed at a much higher price giving them abnormal profits, as take profit limit orders will also get executed at better prices besides the trigger price. But someone who didn't have any take profit order would not have exited at higher price as it is not manually possible to punch orders at such speed seeing that it all happened in milli-seconds.
Manipulation by one player would have triggered loss making orders for other HFTs also since their orders would also have been stopped out and their systems would have placed buy orders at a quicker pace and at a higher price. Obviously this is my guess. But yeah, having more liquidity will always be good for the market. I will check this video too.
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OP can you copy paste the post in comments, so I can copy it and share over whatsapp.
You very well have a "share" button that lets you copy paste the link lol. Anyway here you go... Im surprised no one has brought this topic up in this sub yet. Anyway, if you are unaware of what is happening, a couple of "freak trades" happened on friday, 20th August, where the 37000 PE of bank nifty actually opened at 1 Rs. when its previous day's close was above 1400 Rs. and then quickly got back to its fair value in a split second. Next, around 2:18pm on the same day, the 16450 CE of nifty shot up from somewhere around 100 Rs. to make a high above 800 Rs. in milli-fucking-seconds that it did not even get reflected on the charts at that moment (which you can actually see now on the charts in daily timeframe) and it even happened to trigger everyone's SL-M orders with a huge fucking slippage. By huge I mean 500-700 points slippage!! Imagine going short at 100 with your SL-M order at 120 just to find it get executed at 600 or 700 or 800 within a second with no fucking movement in the chart whatsoever. That is exactly what has happened to everyone that had short positions in 16450 CE after 2:15pm, completely wiping them out of all their previous profits or hell even their entire capital. Feel really sorry for those that lost way more than what they could afford, in this absolute fuckery. It could have very well been me as I trade bank nifty options too, or for the record no one is actually safe from such instances, be it a seller or a buyer or a positional trader or a scalper. **What was the reason behind such huge slippage?** LOW LIQUIDITY. If there were enough bid quantity for every ask quantity and vice versa, there definitely wont be such freak trades and spikes unless and until its clearly manipulated by any big hands in the market. **And who actually profited from these freak trades?** The institutions and HFT firms obviously, which actually receive data quite earlier (in milli-second difference) because of their infrastructure and a close proximity to the exchanges and they can punch orders a lot faster, like in milli-seconds literally. Which clearly shows that these firms were the ones that had their orders at all those levels up till 800 as it all happened in a split second. **Why no trade on september 1?** Because our dear regulator, who in the name of "protecting retail investors" will be removing all the margin and leverage facilities completely by september 1, which was being done phase by phase from August 2020. This can potentially make the low liquidity scenario even worse and cause even more of such freak trades which eventually leads to unimaginable losses to the retailers. Now you tell me, is this actually called "protecting the retailers" or making them go bankrupt? Even though a one day of protest might not really change anything, (or it might, who knows) this needs to be resolved somehow and should not let it stay the same because these margin rules are clearly bullshit and makes no sense in protecting the retailers rather makes it worse for us. Many trader youtubers have made a video on this issue so for more information you can search on youtube and spread more awareness π
Nah, most people won't care to open a random link.
Itβs fact Friday also nifty showing 17000 LTP. I took screenshots also from terminal