Sunday, February 28, 2021

GameStop Revives Dream to Earn Money Online from Stock Market Speculation

PUNJAB NEWSLINE | February 19, 2021 01:00 PM

Young desi traders welcomed the GameStop phenomenon which showed how Wall Street can be outwitted by small investors. Yet, industry experts claim their long-term interests are better protected by Bharat financial market regulations. 

Is Earning Money Online without Investment at All Possible in India?

With advancing technological innovation, desi consumers can already access a growing number of global services and markets. And while no-fee trading apps like Robinhood present a chance to get a benefit from the speculative US stock trading culture, experienced investors point out that manipulating share prices is never a good idea for the national financial market stability.

 This is a paradox which exposes some of the logic behind blaming Wall Street for the 2008 market bubble burst: in attempting to make big financial corporations and hedge funds pay for their habits of short selling targeted companies, organized groups of individual investors create system risks and the conditions for another series of capital market dips. 

Many industry experts have had their say on the subject. Fortunately, it seems that pulling off a GameStop gambit in India is not an easy or a safe thing to do. While it has opened the eyes to the possibilities of earning money from the internet to many inexperienced users, the reality is that this has been a pure form of gambling on a company stock price.

 The US stock market allows for such questionable practices, largely leaving them unregulated. Contrarily, accessing an offshore casino online in India may be easy and safe, yet speculating on the share price of a company is neither fully possible, nor legally allowed. Gambling websites such as 10Cric is one of many offshore companies that offers betting and gambling services online.

SEBI Regulations to National Stock Exchanges

Our regulatory environment is much stricter for its own good. Short selling by offering loaned stock might be theoretically possible, however it must be initially cleared through the Stock Lending and Borrowing Mechanism (SLBM), regularly reviewed and constantly monitored by the Securities and Exchange Board of India (SEBI).

 More importantly, explicit prohibition of Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market (since 2003) legally limits and puts under SEBI control all potentially speculative stock operations. Manipulative and unfair trade practices are precisely defined and investors are strongly discouraged. This regulatory background alone has been a deterrent to the very existence of hedge funds in India for a long time.

 There are additional Market Wide Position Limits (MWPL) on company net positions and futures and binary options trading is explicitly forbidden on Dalal Street or any of the other National Stock Exchanges. This does not only allow for safer market capitalisation campaigns but provides the necessary surveillance mechanisms to offer perennial system stability for the entire investment ecosystem. 

So while the GameStop “fairy tale” might remain an unfulfilled mirage for some aspiring speculators aiming to earn money online, the tried and tested desi approach to regulating the derivatives market has been repeatedly praised by the International Organization of Securities Commissions as exemplary and highly effective.


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