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Hello, I’m Sprhha Srivastava, the CNBC International Executive Editor. Welcome to this Indian edition.
This week, the boom in India’s derived markets has led to many concerns for retail investors, which usually promise young people and profits.
Mumbai, India: The Securities and Exchange Commission (Sebi) logo appears in the Mumbai Bandra Kurla complex (BKC) at Business Business Business.
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This report is in the CNBC “India” newsletter for this week. Like what you see? You can subscribe Here.
Great story
A week ago, the Indian Market regulator sent a strong signal through the Global Business Jane Street, participating in the market of local equities. The movement appeared in a seemingly eye: freezing of $ 570 million profit, the complaint of the index manipulation and the suggestion that the arbitration trading strategy can cross the line.
As the noise is fixed and as the legal delay begins, the real story may be elsewhere. This case provides a window in the structure of the Indian choice market and stress points and what happens when colliding with regulations, technology and retail excitement.
It is much more fragile behind the rise of negotiation volumes: a new generation of retail investors being flooding in complex financial products, often with little experience and even less protection.
The Indian derivatous market has grown rapidly. According to the future industrial association, the countries are now almost 60% of the volumes of equality derivatives. On paper, it looks like a success story. In practice, it is more complicated.
What separates this market is not only its size. It is negotiation.
Nearly 11 million people The futures and opportunities of Equity negotiated at the final event, according to Sebi. The majority of the wide majority were the first timers, often young and drawn through profit promises, are amplified on social media platforms and influence on influence. Many use mobile applications, IMICIAL STRATEGIES Follow or fully understand the telegram channels. This type of behavior is becoming increasingly more common, market participants.
Sebi Date, Based On a Recent Study Derivative Traders, which more Than 40% of These Trads Were Under 500,000 Indian Rupees, OR about $ 6,000, According to Reuters.
This means that most of the participants are working very leverage and dangerous professions, limited income buffers and small formal market training.
Analysts have attracted impulse strategies, often affecting social media and telegram groups. Than trades on the basics of the company or profit forecasts, many investors appear to react to market trends and equal activity – a model associated with fomus or fear. The result is increased exposure to volatility, especially among those without experience with low-risk buffers.
The options market has become heat for this high risk trade, especially the increase in the weekly expiration contracts, which expires weekly short-term contracts. These options are cheaper and more accessible, but they are even more dangerous because they can have a wild value within a few days or minutes.
YouTube and other financial agents from other platforms help refuel this trend, driving millions of Indian merchants. The focus is often at speed and volume – to quickly buy and sell short-term profits.
Many of these investors are negotiating every day and using strategies that can quickly clarify. If the market moves a little against them, they can lose everything. While this type of negotiation promotes the entire market activity, it also poses the possibilities of great losses.
And that’s what is happening.
Regulatory challenge
According to Sebi, more than 90% of retail futures and options during learning lost money last year. Losses have been 1.06 trillion rupees, or approximately $ 12.5 million, rose by 41% from the previous year.
But that’s not just about retailers who lose money. It creates a greater problem: when so many investors do emotional bets or wrong, it opens the door to take advantage of professional businesses, legally and efficiently. These institutional players have better tools, faster systems and more experience, giving light edges.
That is the background that makes Jane Street so significantly.
Sebi reports the prices of the index pricing company that the options will benefit from professions. Jane Street denies this, saying that the standard arbitration strategy was using ordinary tactics between professionals.
The case is constant and depends on the regulatory review, the sebie can still issue the final resolution, the growing events between retail retailers and large organizations. Also raises a key question: market hype and a short-term impulsion driven by the market?
If so, what happens the basics, real performance and value of companies to determine prices? And daily investors still trust that the system is fair?
Sebi is a difficult position. More people want to access the markets, and invest in more global businesses in India. But the retail investor must protect abuse or exploitation.
To do this, Sebi has taken some actions, including minimum trading sizes, requiring better risk explanations and prohibiting weekly returns.
But the main challenge is left: How do you grow fast and exciting market?
Indian derivatous boom is a remarkable story of financial inclusion and technological scale. But only the scale is not a successful metric. As the markets arrive, despite the number of people involved, it will be judged by the number it can do, without configuring it without fail.
What happens next time does not only fit in India’s economic future. Can be careful to other markets with growing pain.
TEP TV selections in CNBC
Meera Shankar went to the United States of India, said that it is part of India, that there is no “anti-American”, with different foreign countries that have foreign policies.
Meanwhile, Chetan Seth, Nomura’s Asia-Pacific Equity Strategist said Indian stock ratings They were the greatest deterrent to foreign investors, as it was a little weight in the country market.
Need to know
The Indian government blocked X 2,355 accounts. Elon Musk-Property Social Networks said on Tuesday, the Ministry of Electronics and Information Technology in the country required by Indian users on 3 July Prevented from entering thousands of accountsIncluding wire services reverter.
Jane Street ban access to the Indian market competition. Due to manipulating the derived market, Jane Street said India’s complaint was directed “Basic index to trade arbitration.”
India is at the top of the supply chain shift ‘. In an exclusive conversation with CNBC TV18, Deutsche Bank Cayo Christian sewing customers told customers, regardless of size, are looking for India Rearrange production chains.
– Yeo Boon Ping
What happened in the markets?
Indian stocks are sold lower on Thursday Nifty 50 Index 0.43% lower from 12:30.
The index has been more than 25,000 this month and has risen by 7% this year, according to Liction data.
Bond reference indian government bond performance was 6.315%.
– Lee Ying Shan
Come
July 14: CPI and WPI Distribution of food and health components Chemkart’s IPO, Airport F & B Operator Travel Services Food Services’ IPO
July 15: Unemployment rate in June, Farming Company Anthem Biosciences of Biosciences
July 17: Office Lease-Business SmartWorks Coworking Spaces’ IPO
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