DERIVATIVE TRADING
Sebi targeting F&O froth but longer term investors may get caught in cross-firing
Sebi's new regulations on F&O trading aim to standardize charges and reduce excessive profits for brokers. This may lead to higher costs for long-term investors and potential changes in brokerage models. Retail participation in options trading is being closely monitored for its impact on savings.
Zerodha’s Nithin Kamath sees end of road for zero brokerage model after new Sebi rules
Exchanges often charge a lower fee to brokers if they generate high volumes. Brokers, in turn, charge traders little to no fees, which has contributed to a surge in trading across segments like derivatives that the Securities and Exchange Board of India wants to curb.
Blow to Discount Brokers: Sebi says charges levied by market institutions should be uniform
Exchanges frequently offer lower fees to brokers who generate high trading volumes, which has led to increased activity across segments such as derivatives. Sebi is considering asking exchanges to halt this practice as part of a broader strategy to temper the excessive trading activity in India's derivative markets. Discount broking firms' revenues are expected to get hit as a significant part comes from the paybacks that exchanges give for the volumes they generate.
Traders' new fancy: Crypto F&O
Indian crypto traders are flocking to Futures & Options (F&O) markets, with leading exchanges like CoinDCX and Delta Exchange experiencing a volume surge. However, a cloud of uncertainty hangs over the regulatory landscape regarding F&O taxation. This shift is driven by a desire to avoid the 1% TDS imposed by the government on spot crypto trading.
Protect, without derivative damage
Financial market regulators are warning about risks from increased derivatives trading in the Indian equity market. This surge in trading futures and options aligns with growing household exposure to equities. Suggestions to raise transaction costs could impact institutional investors and market development.
GIFT Nifty nearing $100 billion monthly turnover milestone
This is an all-time high monthly turnover for GIFT Nifty, surpassing its previous record of US $91.73 billion set in May 2024 itself.
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Jio Financial and Zomato could join derivatives segment, Nifty50
"If we assume Jio Financial and Zomato make it to the F&O segment before the third week of August, then there is a very high chance of them making it to the Nifty50 in the September review," Nuvama analysts Abhilash Pagaria and Abhishek Shetye wrote in their latest note.
Sebi approves stricter norms for inclusion of individual stocks for derivative trading
The criteria for exit would apply to only those stocks which have completed at least six months from the month of entry into the derivative segment. while for existing stocks in the derivatives segment, the exit criteria on the basis of performance would be applicable three months after the date of issuance of circular, Sebi said.
Sebi warns of rising risks from derivative trading frenzy
India's market regulator on Thursday warned of rising risks from a surge in derivative trading volumes, with small investors jumping in to trade risky options contracts.
Sebi revises eligibility criteria for entry, exit of stocks in derivatives market
The regulator has introduced a Product Success Framework for single stock futures and options, aiming to enhance liquidity and participation in the derivatives market while ensuring market development, regulation, and investor protection. The framework will come into effect six months after the circular's issuance.
Tech View: Short covering rally takes Nifty beyond 24K. Here’s how to trade on Friday
The underlying trend of Nifty continues to be positive. A sustainable move above 24000-24100 levels could pull Nifty towards another Fibonacci extension resistance of around 24380-24400 levels in the near term.
RBI warns of risks from rapid rise in derivative trading volumes
A rapid rise in derivative trading volumes in India could pose several challenges, India's central bank said in its Financial Stability Report released on Thursday.
Sebi weighs tighter checks for stocks at F&O entry gate
In its June 8 consultation paper, Sebi had sought feedback from market participants for its plan to revise the eligibility criteria for stocks to be a part of the futures and options (F&O) segment. The regulator wants stocks that are part of the derivatives market to be more liquid and traded by a wide set of market participants to prevent manipulation and lower risks to the system.
Global trends, trading activity of foreign investors to guide movement in mkts this week: Analysts
Stock markets will take cues from trading activity of foreign investors and global trends this week with benchmark equity indices likely to face volatility amid the scheduled monthly derivatives expiry, analysts said. Moreover, factors such as the progress of monsoon and Brent crude oil would also dictate investors' sentiment during the week.
Retail investors play with a time bomb but RBI and Sebi are watching
Futures and options (F&O) trading involves contracts that derive their value from an underlying asset, such as stocks and commodities. Futures contracts obligate the buyer and seller to transact at a predetermined future date and price, while options give the holder the right, but not the obligation, to buy or sell the asset at a set price within a specific period.
Sebi plans tweaks to address derivative trading risks: Report
India's markets regulator, SEBI, is considering tweaks to derivative trading rules to address risks from the explosive growth in options trading. The rules aim to regulate retail trading and involve discussions with fund houses.
NSE chief cautions retail investors against derivatives trading
National Stock Exchange (NSE) chief Ashishkumar Chauhan on Friday cautioned retail investors against trading in derivatives and suggested them to invest in equities through mutual fund route.
F&O Radar: Deploy Iron Butterfly strategy in Nifty to benefit from declining implied volatility
Deploy Iron Butterfly strategy in Nifty to benefit from declining implied volatility. India VIX is down to 16 levels post Modi cabinet announcement. Dragonfly Doji formed on the weekly chart. ADX below 20, RSI at 58.75, ATR at 402 levels.
Sebi proposes stricter norms for inclusion of derivative trading on individual stocks
Capital markets regulator Sebi on Monday proposed stricter norms for the entry of individual stocks in the derivatives segment. The new proposal would weed out stocks with consistently low turnover from the Futures & Option (F&O) segment of the bourses.
Data hints at bullish setup, Nifty headed for 23,560 & 23,890: Experts
Nifty's bullish setup is supported by strong technical indicators, with recommendations for specific stocks in FMCG, pharma, IT, auto, and power sectors for potential gains.
Radhakishan Damani-linked entity buys 43 lakh shares of smallcap, stock zooms 16%
Bhagiradha Chemicals shares were bought at Rs 188.49 per share via a bulk deal on Tuesday. Bhagiradha Chemicals’ 79.73% shareholding rests in the hands of the public, whereas 20.27% is held by the promoter group as per the latest shareholding data available with the exchanges.
Some Indian brokers impose higher trading margins to withstand election volatility
Some large Indian brokerage firms have asked clients to furnish higher margins against trades this week to limit the risk of default ahead of the results of India's national elections, due on Tuesday.
Sebi puts in place SOP for handling of commodity exchange outage, extension of trading hours
Sebi on Monday came out with a standard operating procedure (SOP) asking stock exchanges having commodity derivatives segment to inform about trading disruptions within 15 minutes of such occurrences and extending the trading time by 30 minutes in certain outage conditions.
F&O Radar: Deploy Bull Call Spread strategy in Nifty amid strong FII comeback
With the FIIs returning, there are chances now of short covering in the derivatives markets. In the previous weekly expiry, Nifty has seen a sharp short covering above the levels of 22,800 — a sort of double top. Above 22,800 levels, the directional uptrend has been confirmed for the near-term targets of 23,200.
High-speed traders pile into big short on volatility in India
While the high-speed traders sell options, long-only funds and retail investors buy contracts to make speculative bets or protect themselves against sudden market drops and are often on the other side of the trade, the people said.
Why is the stock market open today? Timing, what to expect and key things to know
Equity cash and derivative markets will hold special trading sessions on Saturday, marking the third occurrence of such Saturday sessions this year. Previous instances took place in January and March.
Unchecked explosion in retail F&O trading may dent household finances, warns Nirmala Sitharaman
The Finance Minister called on NSE, BSE and Sebi to brainstorm together and chalk out robust compliances and regulatory standards to protect investors' interests. BSE and NSE were asked to mitigate systemic risk and ensure market stability. Sithraman said this in at a BSE event in Mumbai.
Another working Saturday! NSE to conduct special trading session on May 18
This is the second such instance in 2024 to test preparedness for handling unexpected disasters. The special session shall be divided into two segments. In the first part, the market will open for normal trading on 9:15 am and end at 10 am.
Sebi rejects NSE proposal to extend trading hours as brokers protest
Sebi rejects NSE's proposal to extend trading hours for index derivatives. NSE CEO indicates shelving due to lack of broker feedback.
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