The changes in taxation of transactions in futures on equity and commodity underlyings

Taxation of transactions in India began with the equity market in 2004. Prior to 2008, the securities transaction tax (STT) was allowed as a rebate against tax liability against Section 88E of the Income Tax Act. This treatment was withdrawn by the 2008 Budget announcement. After that, STT became a substantial influence on the . . . → Read More: The changes in taxation of transactions in futures on equity and commodity underlyings

Rupee and Real futures at ICE

Intercontinental Exchange has announced cash-settled futures on the Indian Rupee and the Brazilian Real [press release] [Saabira Chaudhuri in the Wall Street Journal]. With this, ICE is the first serious global exchange to start trading in the rupee.

Vimal Balasubramaniam and I have pointed out that the global market for the Indian rupee is adding . . . → Read More: Rupee and Real futures at ICE

Hollowing out of the Indian financial system

Business as usual, in India, is taking us to a destination where RBI & SEBI & company will preside over a minor and inconsequential financial system. The bulk of India-linked finance will take place overseas, and the overseas market will dominate price formation for India-related financial products.

Why might this happen?

Finance is the . . . → Read More: Hollowing out of the Indian financial system

The costs in buying versus the costs in selling

All models are wrong, some models are useful. A model reduces complications that are true in return for tractability and insight. In finance, all too often, one complication which has been wished away is transactions costs. A great deal of what we see in the world around us is caused by the costs of . . . → Read More: The costs in buying versus the costs in selling

Oil Prices Make for Profitable ETF Trades: Roger Wiegand

Today’s retail investors have more options than ever before, but there is a shortage of practical information on how to manipulate different investment products, be they ETFs, options or equities. Enter Roger Wiegand, editor of Trader Tracks. In this exclusive interview with The Energy Report, Wiegand discusses his methods for energy investment and . . . → Read More: Oil Prices Make for Profitable ETF Trades: Roger Wiegand

Futures furphies

Wikipedia: A furphy, also commonly spelled furfie, is Australian slang for a rumour, or an erroneous or improbable story.

In Gold Stocks: Ready, Set, by Eric Sprott and David Baker say that “While the futures market is comfortably forecasting a continuation of today’s levels, the majority of sell-side analysts refuse to update their gold . . . → Read More: Futures furphies

Interesting readings

A nice story about UIDAI, by Lydia Polgreen, in the New York Times.

A new insight into India’s north-east states: they are part of a region provisionally named Zomia. An interesting article in the Chronicle of Higher Education by Ruth Hammond. The book.

On 21 April 1956, Jawaharlal Nehru did the first convocation . . . → Read More: Interesting Readings for September 20, 2011

PMs and the LME Warehouse Scam

Gata and ZeroHedge have picked up on this Wall Street Journal article on bankster owned warehouses restricting deliveries out to the minimum amount allowed by the LME. The scam is summarised by the Financial Times: buyers “must keep on paying rent on the metal even after you have asked for it to be delivered, . . . → Read More: PMs and the LME Warehouse Scam

Alternative Stock Market Indexes

I saw this interesting article about the mind-share of Nifty as opposed to the BSE Sensex. It is by Samie Modak and Muthukumar K. in the Financial Express.

The NSE data for June 2010 shows that Nifty futures have peaked at Rs.0.36 trillion of notional turnover in a day (27 Jan 2010) and Nifty . . . → Read More: Alternative Stock Market Indexes

Who Will Make the Exchange-Traded Currency Options Market?

In a few minutes, NSE and USE will start trading in currency options. This will be the first exchange-traded options in India on a non-equity underlying.

Currency options are obviously useful as a risk-management tool. I feel that futures are nice simple linear contracts: they ask the person to make only one decision — . . . → Read More: Who Will Make the Exchange-Traded Currency Options Market?