Missing Retail

On Monday afternoon, the Nifty was down another 120 points or so when Ashu Madan from Religare was part of the guest list. I was also participating in the discussion. Ashu pointed out the absence of retail positions in the F&O segment. I wanted to clarify, therefore I asked a direct question to Ashu. My question was: Does this mean that the current decline is not due to the cutting of retail f&o positions? Yes, said Ashu. Retail was badly hurt when the mid caps fell in the early December decline, and, they did not come back. So, in the current decline, there were negligible F&O positions by retail. He pointed out that the selling is being done by people who actually want to get out.

My Notes: Often, when markets fall rapidly due to the cutting down of retail positions by brokers, a revival comes since smart money comes in to buy at lower levels. Now, smart money may be selling, then who will come to buy?

A second point: where is retail? Maybe, retail has become smarter than ‘smart money’. I hope so.