Las Vegas Style
NSE and BSE
House vs the rest
Many years ago, I had the privilege of seeing the inners of the Las Vegas casinos. Our iit alumnus Sanjiv Goyal who was then the Chair of Paniit USA was the king of casino software. Geeky looking professors, maverick mathematicians and eccentric game addicts … were par for the course in his company. The company was called Droisys and for years it had been the king of casino software. He was not just building software. He was the “House”.
People came from far and wide. Some with dreams, some with hopes, some with divine blessings. Others with debts to pay. They came to the golden strip to try their luck. And except for a lucky few (who were really well publicised), they lost and went home. Back to the realities of their rather unfulfilled lives
The futures and options business is a casino. And the ones running it are the stock exchanges. SEBI did a study and calculated that Rs 75,000 cr pa or some such figure was lost by gamblers who tried their luck on casino SeBI. The industry didn’t bother to check the calculation but went off on a tangent. They said the losses were going into govt taxes and broker commissions. At least most of them.
What they didn’t realise is that it was not the net figure that mattered but the gross. Net loss of rs 100 means that gross loss less profits is Rs 100. The net loss of Rs 75,000 crores actually hides a profit of Rs 50,000 crores and a gross loss of Rs 125,000 crores.
Now who is the House here. The high frequency trader who makes mince meat of the small retail dreamers. And robs them of most of what they have. They are the casino house. Everyone else is just expense. They are the ones who rake it in.
Who are these ? And how much do they make.
It seems the figure is Rs 30-40,000 crores pa and 60% if it goes to just two firms. Citadel and Jane Street. A couple of hundred Indians get 10% if this as bonuses. That is a massive bonus for each. 90% goes out of the country. Daylight robbery.
This is not like the Vegas casinos. It is a fixed match. And the two are a cartel. Across the table are individuals.
With zero chance of success.
What does the exchange do in this. What does NPCI do? What does sebi gain ?
They do nothing. They get nothing.
Can we get foreign punters. Sure we can. The digital rupee is a start point. Now come to the dominators.
How do we get the dominators out. It is quite simple. Cancel their licenses. Or limit their positions.
Who should do it ? The Regulator
Will they do it ? Of course not.
Why ??? Because we are foolish Indians
First we let the Mughals in
Then the British
Now it is turn of the high frequency trader who traders.
Guys
Enjoy
Casino Royale is on your phone