SEBI made F&O trading costlier to curb speculation. Traders just moved to something riskier!!

What This Video Is About

The video discusses SEBI's efforts to reduce speculation in the Futures and Options (FNO) market by making trading costlier, but traders have found alternative, riskier ways to trade.

Major Ideas Discussed

• SEBI's measures to curb speculation have led to a shift in trading behavior, with traders moving to options and other riskier instruments.
• Key statistics show a significant increase in High-Touch Trades (HTT) on futures and options since 2016, and a jump in minimum contract size.
• The proportion of options trading has increased to about 90% of all FNO trading, with traders buying options that require only the premium, not a large margin.
• Trader performance varies, with around half of future traders and 40% of option sellers being profitable, but only 10% of option buyers being profitable.
• Risky trading practices have emerged, including weekly expiries, same-day bets, and margin trading, with crypto FNO apps offering high leverage, posing significant risks.
• The video highlights the lesson that every rule has its side effects, and sometimes those side effects are bigger than the problem it was trying to solve, with risk never really disappearing, but rather moving to where people are not looking.

What to Watch Next

The video suggests monitoring the development of risky trading practices, the impact of SEBI's measures on the FNO market, and the potential consequences of unregulated crypto FNO apps offering high leverage.