Greek Language (GL) provides a simple, built-in function that can identify one of the two dozen predefined candlestick patterns as mentioned below :








Bearish Engulfing



Let’s Go, Algo !!!


With several amendments over the years, India provides a good opportunity for Algo traders due to a number of factors such as co-location facilities and sophisticated technology at both the major exchanges; a smart order routing system; and stock exchanges that are well-established and liquid.

Algo trades account for over 43% of India’s stock market turnover. In the US, where retail investors also engage in Algo trades, 90% of the turnover is from automated systems. The global average is 75%.

SEBI was among the first regulators to issue a discussion paper proposing strengthening of rules on Algo trading in August 2016.

With rules in place, Algo trades in India will rise to the global average, market participants said. There are a lot of startups in this space waiting to enter once rules are in place. This will be a big boost for Algo trading.

Greeksoft @ Motilal Oswal Business Impact Conference (MOBIC – 2017)


Greeksoft Technologies: One stop solution for all your trading needs.



Greeksoft @ FinBridge Expo 2017


Sebi allows options contracts in commodity trading.

Exactly a year after strengthening regulation of the 13-year-old commodity derivatives market, the Securities and Exchange Board of India (Sebi) has taken the first steps towards its growth by allowing exchanges like MCX and NCDEX to launch options in commodities.

Also, it has expanded the list of notified commodities that exchanges can launch by adding to it eggs, diamonds, skimmed milk powder, tea, cocoa, pig iron, biofuels and brass.

Sebi will spell out the details of the type of options and the products on which they can be launched in due course. An advisory committee constituted by Sebi after erstwhile commodity regulator FMC was merged with it on September 29 last year had recommended launch of gold and refined soya oil options initially.

The introduction of new commodity derivatives products is considered to be conducive for the overall development of the commodity derivatives market, attracting broad base participation, enhancing liquidity, facilitating hedging and bringing in more depth to the commodity derivatives market,” Sebi said in a circular. “The commodity derivatives exchanges willing to start trading in options contracts shall take prior approval of Sebi for which detailed guidelines will be issued in due course.”

Other important regulations are allowing equity exchanges like NSE and BSE to launch commodity futures segment and commexes like MCX and NCDEX to launch equities and currency segments.

Sebi will also enable margin fungibility by permitting merger of a commodity subsidiary of a brokerage with itself. In time, other products, like indices, and institutional participants like mutual funds, FPIs etc could be allowed to deepen the market.

Indeed options comprise 75% of NSE’s total derivatives turnover of Rs 404 lakh crore in the fiscal year so far. Average daily turnover of equity derivatives on NSE has been Rs 3.31 lakh crore against just Rs 25,000-30,000 crore for MCX, NCDEX and NMCE, where only futures are traded and institutional participation disallowed.

Since delivery is envisaged, the type of option could be American style though markets have crossed their fingers. “European styled options are being traded in Indian equity and currency derivatives markets, American styled options for commodities are in vogue in developed markets like CME. We are awaiting guidelines from Sebi to decide on the product type,” said Mrugank Paranjape, MD, MCX.

“For farmers, it (options) will be a game changer,” said Samir Shah, MD, NCDEX. “It would help them to sell their produce in the derivatives market and thereby get the benefit of price protection in case the price falls below their cost of production and also derive the benefit of any rise in the price. Options are also a much better hedging instrument as compared to futures for hedgers.”

Source – The Economic Times.(September 29, 2016)



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BSE plans trading in commodity derivative segment


Leading bourse BSE on Saturday has said that it plans to launch commodity derivative segment which will allow trading in metals and has approached market regulator Sebi for approval.

“BSE plans to set up a commodity derivative segment as soon as approvals are in place. It would consist of non-agricultural commodities like metal, oil and gas,” BSE Managing Director and CEO Ashishkumar Chauhan said.

Post the merger of the capital market regulator Sebi and commodity market watchdog Forward Market Commission (FMC), the exchange members need not create a separate subsidiary to start commodity trading.

“As and when that (merger) process is complete, our members can trade in commodities. Earlier, they had to open a separate subsidiary to become member of commodity exchange.

Now they are allowing us to trade as part of BSE as and when the approvals come,” Chauhan said.

At present, there are two major national and six regional bourses which offers commodity futures trading in the country.

As BSE completes 140 years of operations, Chauhan said BSE wants to position itself as “investment bourse” of any type of asset class rather than just be confined to being an equity trading platform.

He further said that they have got board approval for setting up of an international exchange in Gujarat’s GIFT City.

“We will apply to regulator Sebi. This is first time that an international finance zone is set up and we plan to offer all asset classes which will include equity derivative, currency derivate, interest rate derivative, and international and domestic commodities in the international exchange,” he said.

The new exchange will also help global companies raise finance from other overseas investors.

“We want to raise funds for Indian companies and foreign companies using international finance zone. For international finance zone to succeed and compete with Singapore, Hong Kong and others we need to ensure that it is able to provide all options under one roof,” Chauhan said.

He said the planned international exchange would be a BSE subsidiary through which companies can raise funds through issue of depository receipts.

“Currently, we are in the process of discussion with MCA and others what names are available,” Chauhan said when asked what would be the name of the new exchange in the GIFT City.

GIFT city, situated in Gujarat, caters to India’s large financial services potential by offering global firms a world—class infrastructure and facilities. It aims to attract the top talent in the country by providing the finest quality of life all with integrated townships, IFSC and multi—speciality special economic zone.

 Source – The Hindu (July 9, 2016).


Brokers urge traders to adopt Algo Trading

Objective of the move is to use automation to maximise trading profits.


‘Completely automate your strategy with only a few clicks’; ‘Maximise trading profits by using approved execution strategy’, ‘Customise your strategy with custom target and stop-loss, bullish or bearish signals without any programming knowledge’.

These are some of the benefits of algo (algorithm-based) trading highlighted by Ludhiana-based broker MasterTrust on its website. MasterTrust is not the only one goading retail traders to adopt algo-based strategies to trade. A slew of other top domestic brokers such as Edelweiss Financial Services, Sharekhan, IIFL, Prabhudas Lilladher and Reliance Securities have started selling the concept to traders.

The objective remains the same: use automation to maximise trading profits. The broker too benefits by getting an additional fee from the traders — as high as Rs 15,000 to Rs 30,000 per month per strategy — to use the facility. “These strategies help traders tap opportunities in a milli-second, which is practically impossible through human intervention. Besides, algos can provide an additional source of revenue to brokers since customers are willing to pay a fee for using the facility,” said B Gopkumar, chief executive of Reliance Securities. He said Reliance Securities currently have three or four standard algo strategies in place and might do a mass rollout to its clients in the next month or so.

The simplest algo strategies could involve buying a stock when it rises above the 200-day moving average, or selling a particular stock when it moves into overbought territory. There are many other sophisticated strategies such as pair trading and scalping. Scalping, for instance, involves making profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple of hundred trades in a single day to capture small price moves.

“At Edelweiss, we are addressing the needs of professional traders and high net worth individuals who have large trading teams,” said Harish Sharma, business head — brokerage and wealth management, Edelweiss Broking, adding they were looking to expand the suite of algo products in the coming months.

Algo trades use advanced mathematical models for effecting transactions and can pump thousands of orders in a second. There are multi-client and single-client algos. The former are automated strategies targeted at multiple clients and based on a preset system of rules developed by brokers or algo vendors. Single-client algos are customised according to the needs of a particular client. Popular algo vendors in the market include Omnesys, Symphony Fintech, and Greeksoft Technologies.

Brokers cite several benefits of employing algo-based strategies. It takes away the emotions from decision making, enabling traders to honour stop-losses and other targets. It also helps clients size their trades more effectively and ensure they don’t become over-leveraged in the market.  Some experts, however, believe algo-based strategies are not suited to individuals because of the complexity and the risks involved.

“Retail traders may not be in a position to understand some of these strategies and burn their fingers,” said a broker, on condition of anonymity.

While algo trades provide liquidity as more orders are placed, they can distort prices if wrong programmes are allowed to run unchecked. However, this is mostly a problem only in cases of large orders executed by institutional clients.

As a precautionary step, stock exchanges currently audit all algos to back test them and assess their risk parameters, and might take 25-40 days to before greenlighting a particular strategy.

Interestingly, in September last year, the Association of National Exchanges Members of India (Anmi), a body of stockbrokers, had written to the regulator, suggesting ways to minimise risks arising out of algo trades. At present, about 20 per cent of the turnover on the exchanges comes through the algo route.

Source – Business Standard (May 30, 2016)


Sebi may allow trade in commodity options soon


Hedgers and punters in commodity futures could soon get to trade options in gold, silver, soyabean and guar seed once Sebi approves the launch of the new products in around three-four months, three persons aware of the development told ET. Also, portfolio management services (PMS) could be approved by the regulator in due course, they added.

The matter was discussed at a commodity derivatives advisory committee (CDAC) meeting on new products and participants held in Sebi’s office in Mumbai on Monday. Sebi officials, commodity exchange chiefs and heads of commodity brokerages were among those present at the meeting.

The 22-member CDAC, chaired by Niti Ayog member Ramesh Chand, will pass on its recommendations to Sebi next month on the matter after which the latter will take a view.

“Discussions (on new products) are on by the sub-group constituted by the advisory committee,” a Sebi official said. “Sebi is likely to receive the recommendations of CDAC sometime in July after which further examination will be done at the regulatory level and a view will be taken.” He did not comment on the types of options or the commodities that would be considered, as discussions were still under way.

One of the persons cited above said, “Options will be launched in liquid counters… probably gold and silver on the non-farm side, and soyabean and guar seed on the farm side.”

Also under discussion were the kinds of options to be launched. It’s likely that options culminating in delivery, or European style options, will be approved. European style options can be exercised only upon maturity, or settled in cash before expiry. The other type of options, American style, can be exercised on or anytime before maturity. Commodity options will be based on futures contracts as unlike in the equity market, the market lacks a cash segment. Options in the equity market are mostly cash settled.

“There are two possibilities — options that devolve into futures or options that are settled based on the final settlement price of the futures contract. My guess is it’s likely to be the latter,” said the other person cited above.

For a non-farm product on which an option can be launched, one of the criteria being discussed is that its average daily turnover be around Rs 5,000 crore. For a farm product, the ADT could be Rs 200 crore. All four commodities cited above meet this criterion.

Gold and silver are traded on MCX, the country’s largest and only listed commodity bourse. Soyabean and guar seed are traded on the country’s premier farm bourse NCDEX.

Source – Economic Times (June 23, 2016).