Peak margin norms to hit market depth without impacting on trading volumes

Most new customers are investors who mostly buy and hold; they aren't adding liquidity to markets the way day traders do, says top market player

The transition to the fourth and final phase of peak margin requirements from Wednesday is unlikely to bring down trading volumes significantly but may impact market depth, adding to the impact cost.  

"While the markets have grown phenomenally in terms of participation thanks to the bull market, the market depth or the total quantity of bids and asks in any stock has only deteriorated over the last year. Most new customers are investors who mostly buy and hold. They aren’t adding liquidity to the markets the way day traders do," said Nithin Kamath, founder & CEO, Zerodha, adding that this