I can promote 1 Lot of financial institution nifty price 6.9 lakh (15*46000) with just one lakh rs in my dealer account.
Think about, a black swan occasion, the place Financial institution Nifty strikes 20% in 1 second (Nuclear or technical bug, any purpose). i’ll lose 1 lakh 38 thousand. 38 thousand greater than what’s in my dealer account.
How can I cease my dealer from asking me greater than I had put?
If I commerce utilizing an organization account, I can declare my firm bankrupt, and keep away from paying 38000 to anybody. My private wealth can be protected. However I can’t commerce utilizing firm account as a consequence of guidelines.
Is there some other approach to shield private wealth from buying and selling loss?
Hedge the commerce, on this case BUY PE. Ofc it isn’t free lunch however a premium that you simply pay. (like insurance coverage)Such far OTMs aren’t very costly for black swans.
For choices writing / Futures contracts these dangers exist, it’s restricted when shopping for choices.(crude contango has solely occurred as soon as until date)
No, I’m not speaking about defending myself like that.
I’m speaking one thing I can do exterior dealer to guard it like forming firm.
Shopping for OTM PE and so on can all the time fail as a consequence of technical bug and so on
After all, even If i commerce utilizing my firm, I’ll attempt my finest to not lose cash, i’ll purchase hedge. However I desire a answer the place, it doesn’t matter what, even when probablity is 0.0001%, i’m protected.
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i’m in search of one in occasion of dying.i dont need life insurance coverage cash and so on. for those who discover one, let me know too…
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Solely Purchaser can have restricted threat.
Nope. Let me provide you with a latest instance.
Some choices patrons tried to put exit order for Sensex. It didn’t get positioned. They positioned them once more 2-3 instances. And after someday, all orders acquired executed. So patrons threat can be limitless as a consequence of tech threat.
You’re speaking about software program primarily based glitch. Not primarily based on buying and selling aspect. Nonetheless , that manner additionally purchaser aspect threat is restricted.From the purchase value to zero .
@nithin
Sir, would you be excited by creating an insurance coverage product for Kite, the place you comply with not cost the person greater than the quantity they’ve deposited of their dealer’s account?
For instance: If a person deposits 1 crore INR in Kite and in some way loses 1.1 crore as a consequence of any purpose (black swan occasion, technical bug and so on.), then their account stability can be adverse 10 lakh in Kite. Principally, the person will owe you a mortgage of 10 lakh. However with the insurance coverage, you waive that quantity and reset the account to zero.
The probabilities are that nobody will ever want to assert the insurance coverage as a result of SEBI has good margin guidelines. However for paranoid individuals like me, it can convey peace of thoughts.”