Manage the change; not fear it
In the past few months, the RBI governor has repeatedly spoken about “diversion” of household money from the bank deposits to stock markets. He has in particular mentioned rising household (retail) participation in the derivative trading, as a cause of concern for the financial stability. The securities market regulator (SEBI) has also cited high retail participation in the derivative segment as a systemic risk to the financial markets. For a common man like me, it is difficult to understand how option buying by retail investors possess any challenge or risk to the financial system and markets. My understanding of the securities markets is very elementary. Whatever little I understand, it works like this. Registered and/or authorized market intermediaries are not allowed to receive from or give cash to their respective clients. This implies that all legal transactions in the stock markets are settled through the banking system. When someone buys a security, there is necessarily a count...