InvestorQ : Do you see the new rules impacting the BTST trading in India?
Neelam Naik made post

Do you see the new rules impacting the BTST trading in India?

Answer
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Anu Biswas answered.
4 weeks ago


Perhaps the biggest hit to traders and brokers could come from the virtual bar on BTST transactions. Remember that when a trader does a BTST trade, there is surely auction risk but it clarified between the broker and client that auction risk is on the client.

Let us look at this statistically. Total auction position risk is just about 0.2% and that is hardly material from the market perspective. Only a small portion of this auction arises due to BTST trades. The new dual margining rules will make BTST unviable in the first place.

The fact is that asking traders to pay margins on buy and sell sides will dissuade trader participation. BTST allows traders to smartly play overnight risk and that should ideally be allowed in the interests of market liquidity.