SEBI banned Jane Street on 3 July. This means that the companies of Jane Street Group were banned from trading in the Indian market. In the interim order, SEBI had asked to put Jane Street in more than Rs 4000 crore as a escrow account. Jane Stere has put this money in the escrow account. The entire case has affected the demand of the stock market. The turnover of trading in the derivative (F&O) segment has decreased significantly.
Jane Street Was a big player in the options segment. The property trades that it had had a large stake in the total turnover of the derivative segment. This is why traders are disappointed. However, the matter is not so full. The purpose of every trader is to earn profit. The trader wants to earn maximum profits in the shortest time. Professionals traders know that this is just a desire, which is without actionable checklist.
The trick of earning profit is how much the right stock you choose. Second, your time and price should also be right. The question is, what does smart property trader want? A trader wants to invest in stock that has more liquidity. This means that it should have more turnover, that is, there should be no problem in entry and exit. If the orders of bye or cell are large, then the prices should not be high. Second, the trader wants a low bid/offer spread. What is a spread?
If you have traveled abroad, then you must have gone to the bank to buy foreign currency. You must have seen that the bank offers you a coat of forex. The bank offers a low rate on which he can buy foreign currency from you and offers a higher rate on which he can sell you foreign currency. The difference between the purchase price and the sale price is called a spread. In simple words, it is the profit margin of the bank.
The higher the spread of the bank, the greater your cost. This means that it is your loss to have more spreads. This also applies in the case of stocks. Your tech home profit decreases when the spread is high. It is also called horizontal spread. The second aspect is the impact cost. If the Bayer is ready to buy 5 lots of XYZ at Rs 110 and the next 5 lots are worth Rs 109.50, then the impact cost will be Rs 0.50.
If a Big Ticket Bayer or Sailor wants to take a trade in a large lot, then there is a lot of possibility that his entire order will not be an exhibit at the bean price. Therefore it is necessary to reduce the impact cost. When Jane Street was active, there was a spred small and traders were getting entry and exit opportunities in the market. This means that Tech Home Profit was good. Traders are disappointed with Jane Street being out of the market. They have reduced their trade size.
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Traders also want to make more money on every trade. Due to this, horizontal and vertical spreads are increasing. It is going out of the comfort level of many professional professional traders. More spreads are also removing some traders from the market who are not ready to trade with such big spreads. It needs to be understood that nothing is the reason in financial markets without any reason.