"SEBI's F&O Trade Shake-Up:
“SEBI’s F&O Trade Shake-Up:

1. Trading in the stock market has become increasingly popular in India. In the last few years, especially after covid, the number of people trading in the market has increased. If you also do trading in the stock market, then this news is useful for you.

The market regulator is preparing to make a major change regarding share trading, which will affect all traders.

Market rally increased fear

In fact, the preparation of market regulator SEBI is related to reducing the risk for retail investors. For this, SEBI proposes to link the amount of equity derivatives in the assets of futures and options traders. According to Reuters, SEBI is taking this step in view of the recent rally in the Indian stock market. SEBI feels that a large number of retail investors can be attracted by the rally returned in the market.

"SEBI's F&O Trade Shake-Up:
“SEBI’s F&O Trade Shake-Up:

so many people are losing money in the market

According to SEBI data, the participation of retail investors in the equity derivatives market has increased by 500% in the last 3 years. According to a study by SEBI in January, a large number of these investors are those whose age is around 30 years. In the case of such investors, 9 out of 10 traders have lost money in the market. The average loss for such investors is Rs 1.1 lakh. This is a huge amount from the point of view of small investors.

This is the important proposal of SEBI

These horrific figures of loss to retail investors are a matter of concern for SEBI. SEBI had earlier asked brokers to display the risk of trading in derivatives prominently on their websites. Now SEBI is preparing to take strict steps to protect the interests of retail investors. Sources have been told in the news of Reuters that SEBI is deliberating on the proposal to link the value of the trade in futures and options to the income and net worth of the traders.

Trading will be limited

According to sources, if the proposal is approved, then the responsibility of giving information about the net worth and income of the traders to the stock market can be given to the brokers. Once the broker informs the stock exchange about the investor’s net worth income, the exchange will be able to monitor the traders’ exposure to futures and options through different brokerage firms. The limit will be imposed on the trading volume according to the net worth of the trader.

What will be the effect of change

Now understand what its effect is going to be. There is huge profit in futures and options trading, but the loss is also terrible. Many a times it happens that a huge loss makes all the earnings of the traders drown. If the new rules come into effect, then the trading volume limit will be imposed in the fixed multiple of the net worth mentioned by the broker. The trader will not be able to expose himself more than that limit. In such a situation, the loss that can be caused to the traders will also remain in a limit.

Leave a Reply

Your email address will not be published. Required fields are marked *