The ongoing heightened interest and activity in the futures and options segment of the stock market is beginning to 'appear like a stampede', and regulator Sebi is rightly getting concerned, veteran market investor and MD at Kedia Securities, Vijay Kedia has said.
Speaking to CNBC-TV18 in a conversation on July 9, Kedia reiterated that he too has been echoing concerns about the rising frenzy in the F&O segment for nearly a decade. "Sebi is really working hard, and it wants to stop this euphoria. (In fact) It is not a euphoria, it looks like a stampede in the market", Kedia said. "I fear this may not end well, and Sebi should take action," he added.
Vijay Kedia was responding to the Moneycontrol exclusive that a Sebi working group has recommended increasing the lot size of derivative contracts to Rs 20-30 lakh from Rs 5 lakh presently, and restricting weekly options to only one expiry per stock exchange per week.
"Option is the new buzz word and every one among GenZ is talking about it," Kedia said. Not just the Options side of the stock market, even the cash segment seems to be in the grip of this frenzy, he added.
Budget Expectations
Talking about his expectations from the Union Budget, Vijay Kedia thinks FM Sitharaman could tinker with the capital gains tax on July 23, as it may be a good time to bring in the change.
"I think some tinkering in the long-term capital gains tax is likely, either on the tax rate, raising from 10 percent to 15 or 20 percent, or on the tenure front, raising from 12 months to 24 months," Kedia said. His argument for this stems from the heightened interest in the futures and options segment, which has providing more than 95 percent of the trading volume. In this market, "less than 10 percent are long term investors. It (capital gains tax change) will not hurt the retail investor", Kedia added.
The National Stock Exchange (NSE) and BSE are the world’s top two bourses in terms of F&O volume and the turnover has reached such levels that the combined turnover of the two Indian stock exchanges accounted for more than 80% of the global turnover in the month of April.
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