The IRCTC Incident - Who would pay for the MTM Shortfall?
The IRCTC Incident - Who would pay for the MTM Shortfall?
Yesterday I was one of those who could use the 30% free fall in the share prices of IRCTC and added a few shares that are now available at an affordable price per share thanks to the share split done by the company. The split was done with the good intention of enabling more participation from the retail traders/investors and that is what happened as I could buy those shares at 700. The media is now full of articles trying to explain why was there a fall and why the convenience fee is important, etc.
However, no one is asking the question - who would fund the intraday Marked To Market losses that SEBI now mandates FNO traders to top up?
A few months ago it was Tata Motors whose share prices tanked big time when they announced semi-conductor shortage-related constraints, and then recently it was the turn of TCS, whose share prices were hammered post results and now IRCTC just because of a circular!!
I am wondering if the watchdog of the capital markets is indeed watching this? And if so, what it proposes to do to protect the interests of the genuine #traders and #Investors?
Consider this --
The IRCTC Nov 21 Future contract close price on 28-10 was 911
Lot size = 1625
IRCTC Futures low for 29-10 = 651
Difference = 260
Max MTM Loss = 422,500 per lot
EOD price = 846
Difference = 65
Max MTM Loss = 105,625 per lot
Who is going to fund this shortfall? Should the traders/investors be penalized for such unexpected shortfalls?
Who will answer these questions is my question to SEBI? I hope industry leaders like Nithin Kamath, Motilal Oswal, and the like would help retail traders/investors get some answers.
I was lucky not have been a part of FNO trade in the scrip as so far I am not familiar with its intraday price action. However, I am keen to know if any of the readers of this post were caught on the wrong foot or on the right foot?
Your views/experiences would help spread awareness and awaken the regulators to work for the benefit of the retail traders/investors.
Thank you!
Umesh
30-10-21
Yesterday I was one of those who could use the 30% free fall in the share prices of IRCTC and added a few shares that are now available at an affordable price per share thanks to the share split done by the company. The split was done with the good intention of enabling more participation from the retail traders/investors and that is what happened as I could buy those shares at 700. The media is now full of articles trying to explain why was there a fall and why the convenience fee is important, etc.
However, no one is asking the question - who would fund the intraday Marked To Market losses that SEBI now mandates FNO traders to top up?
A few months ago it was Tata Motors whose share prices tanked big time when they announced semi-conductor shortage-related constraints, and then recently it was the turn of TCS, whose share prices were hammered post results and now IRCTC just because of a circular!!
I am wondering if the watchdog of the capital markets is indeed watching this? And if so, what it proposes to do to protect the interests of the genuine #traders and #Investors?
Consider this --
The IRCTC Nov 21 Future contract close price on 28-10 was 911
Lot size = 1625
IRCTC Futures low for 29-10 = 651
Difference = 260
Max MTM Loss = 422,500 per lot
EOD price = 846
Difference = 65
Max MTM Loss = 105,625 per lot
Who is going to fund this shortfall? Should the traders/investors be penalized for such unexpected shortfalls?
Who will answer these questions is my question to SEBI? I hope industry leaders like Nithin Kamath, Motilal Oswal, and the like would help retail traders/investors get some answers.
I was lucky not have been a part of FNO trade in the scrip as so far I am not familiar with its intraday price action. However, I am keen to know if any of the readers of this post were caught on the wrong foot or on the right foot?
Your views/experiences would help spread awareness and awaken the regulators to work for the benefit of the retail traders/investors.
Thank you!
Umesh
30-10-21
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