Why is investor Madhu Kela supportive of F&O market curbs on speculative trading?
Madhu Kela is supportive of a government/regulatory action on the growing speculative trading in the derivatives market arguing that irrespective of the overwhelming investor traction, there is a lack of understanding as to what they are getting into. He said he was hopeful of a collective action among the Securities and Exchange Board of India (Sebi), Reserve Bank of India (RBI) and the government on this.
Citing an «alarming incident» that he came across, Kela said, «A friend of mine was saying that his mother asked me about F&O. She is 82-year-old and this friend asked her what have you got to do with F&O and what do you want to do? She said that I have nothing to do with F&O. In our house there is housework going on and three carpenters are working. They do not work between 9:15 and 3:30 because they are doing F&O trading and our work has slowed down,» Kela said.
«Now, this is an incident which is not hearsay. If this is the level it has reached, it is alarming,» he warned.
«I am completely and wholeheartedly supportive of what the government and the regulators are thinking because, amid the retail crowd that is buying and selling this put and the call options, there is a lack of understanding as to what they are getting into. Even though people are not making money, the hope that they can make money if one or two out of 10 trades go right, is keeping people in the F&O market.» Kela said.
Kela, who publicly holds 10 stocks with a net worth of over Rs 2,092.2 crore according to Trendlyne has investments in
