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Binaya Mishra Comment On Regulatory Notice 22-08

BINAYA MISHRA
N/A

Comments: 1. I agree that while allowing investors to trade Options, they need to understand the product well. This can be ensured by (a) looking at their qualifications and /or experience in Finance; (b) if (a) is not satisfactory, then look at their tranck record of trading options to see if they have made 75% or even up to 90% losses; if so, they need to undergo educational guidance before they can be allowed to deal with Options. 2. Investors/consumers access to trading stock, ETFs (both leveraged and inverse) and options are valuable for them. If they want to trade in certain instruments without understanding the risks, they will soon be burnt and learn their lessons. In such cases, the broker may limit the trade to a maximum amount (say, $10,000 for Options and $50,000 for leveraged and inverse options). Once they show a positive track record, they should be allowed to trade such instruments. 3. Brokers should not directly recommend any such instruments.