Am telling you secured loan is not as secure as you think. Well, you say bank will check your creditability before sanctioning loan along with collateral. Right. So if business fails, you lose your collateral too.
In trading at least only the money that you have is lost. Not your house and Jewellery.
Anyways. I am not for or against traders. I don’t even consider myself a trader. But in my opinion everybody should have the freedom to do what they want.
Thanks for your opinion.
Let us stop all forms of loans (student education loans, housing loans, vehicle loans, loans to farmers, loans to businesses) because they are all some form of leverage.
How do you think value addition happens, you think facebook and google actually has assets worth trillion of dollars, value is in perception, in most businesses money just changes hands, you pay a business and they give you service or product, in trading we pay the risk and receive the reward, the principal is the same, even in ordinary business you need some kind of edge to sustain in long term, same as trading, trading without edge is gambling, and in that case all your points are valid.
You should place your argument with the Taxman who defines FnO trading as business activity. IMO traders provide the critical service of liquidity risk mitigation.
Over 90% startups also fail. So are u saying no one should start a business ? Over 90% who try to be a professional sportsman, artist, CA, scientist etc also fail. So are u implying that no one should venture in to it ? After all its my money that am putting on the line. I guess I should have the freedom to deploy my cash however and wherever I deem it to be fit.
K. SEBI is likely to disappoint you for the time being at least.
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While exchanges are ready to increase trading activity
There are 2 aspects to this as per this article – see here
- 9 out of 10 individual traders lost money in FY19 to FY22
- Govt. disincentivise retail participation in F&O by hiking STT
Both the reasons are too immature by the people who have done the research.
For point no:1 – Is there any financial market in the world where more than 10% retail traders are profitable? When retail traders go against the institutions with a bigger talent pool, super computers & mathematical models – the failure rate is quite normal.
For point no:2 – hiking tax will not deter someone from using a product. Cigarettes & Alcohol are the perfect example.
For this point – its again a dichotomy. If full time traders are not making enough money as per point: 1 – how will extended trading hours encourage office goers to do trading part time work?
If the broking industry sees so many restrictions like curbing retail for trading etc, their operational and compliance costs will go up (which will get passed on to customers) and ruin this sector.
I have seen how taxes & reforms have damaged the Indian Textile Industry. Hope it does not happen to Fintech and Financial services.
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Small difference.
My statement is about ‘adding value to society’ not about ‘adding value to capital markets’
Also, i am curious to know,
How my trading in F&O helps investors in equity with liquidity?
‘Secured loan’ is word used by lenders, not borrowers.
I am talking about borrower’s POV in my previous answer.
When banks asks me to bring my house documents, before a loan is sanctioned, its a visual and practical reminder that i could lose my house.
Where as, trader doesn’t have any such visual reminders that discourages or reminds them that they could lose all money. (given the fact that 90% of them lose money)
I would be very careful about trading, if i am asked to front full contract cost.
“…But in my opinion everybody should have the freedom to do what they want…”
I agree to some extent, certain levels of freedom is required for society to evolve.
But, history told us that, certain level of nanny state is kind of good in a away.
As of today, we let govt
- ban drugs
- ban certain content from arts
- ban on buying alcohol certain times of the day
- how to look after children
- save some money aside for retirement
Why let govt tell us what to do with such personal matters and not let personal freedom prevail?
we do so because, not everyone is judicious with their choices in life and not become burden to society later on.
Same goes with trading.
are you saying there is no difference between
=> loan for house/higher education
to
=> loan to go play rummy