High frequency trading and how it affects you

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What is high frequency trading and how it affects you?

SREE IYER  20/04/2015 01:02 PM

What is it about high frequency trading that makes one rich overnight? Is it legal? If so, why is everyone not doing it?

 

I was always fascinated with Michael Lewis's writings... His Liar's Poker was truly a path breaker, giving fantastic insights into what happened in Wall Street in the 80s. On one of my TV channel surfing experiences, I stumbled on to an interview of Brad Katsuyama by Maria Bartiromo in Fox Business Channel on his new IEX exchange. In the course of this chat, I learnt that Michael Lewis had written about Brad and his company IEX in his new book titled ‘Flash Boys’ and that got me interested. If there is anyone who can explain a complex topic in simple, easy-to-understand terms, it is Michael Lewis. 

 

I left for India shortly thereafter and while in Bangalore, picked up Flash Boys. I had intended to read it but got caught up with other stuff and could not get to it. On my flight from Bangalore to Mumbai, I came across an article of how 2 friends moved back from Wall Street to a tiny office in Bandra-Kurla complex and are generating business worth Rs4,000 crore a day using high frequency trading strategies. The numbers were truly mind boggling - even if they were generating 1% profit, that works out to Rs40 crores a day or assuming 200 trading days in a year, Rs8,000 crore (about $1.25 billion)! It was one of those moments, when you start asking yourself if you were in the right profession. I filed away this information for future reference as I flew back to the US.

 

I finally got time to pick up Flash Boys and got hooked right away. Despite being a work of non-fiction, I could not stop turning the pages. When I put the book down, I started thinking as to how many other countries are now having high frequency trading (HFT) and I suddenly remembered the article about RKSV and their amazing turnover as a discount broker in Mumbai. What is it about high frequency trading that makes one rich overnight? Is it legal? If so, why is not everyone doing it? But first, let us take a step back and understand the evolution of high frequency trading...

 

On 19 October 1987, the Dow Jones Industrial Average crashed by 22.6%, the single largest one-day stock market decline in history. Many reasons were given for the loss, one of which was how globalization was affecting financial markets across the world. In those days, a stock was bought or sold using a broker whom you called up (or he called you!) and agreed on the stock, its price and how many. As the market crash was playing out, it was rumoured that many brokers stopped answering their phones! The US Securities Exchange Commission (SEC) addressed this and several other structural flaws and one of the remedies suggested was to have computerised trading. This set off a huge wave of modernisation and computerisation in Wall Street, which continues till date.

 

NASDAQ (and then NYSE) went public in 2000 and had their own profit targets and started finding ways to increase revenues.  To increase competition, the US government also allowed setting up of more stock exchanges and by 2010, there were 13 stock exchanges. Some of these, were setup by brokers and high frequency trading companies, which should have raised red flags (after all these are intermediaries and ideally stock exchanges should be run by those for whom they exist, i. e. investors) as Michael Lewis observes in this inteview, on how these 13 Public Stock Exchange have become an unfriendly place for the investor.

 

To be fair, there have been many benefits because of computerisation too. One of them is the cost of commission per trade. However, as technology advanced, faster computers and networks enabled some firms to start trading between computers based purely on algorithms (an algorithm can be thoughts of as a series of steps to solve a problem). At first, it seemed like all was well. In 2006, approximately 26% of all trades in the US were done by HFT firms and by 2010, this had reached 52%. What boggled the investors’ minds was how HFTs could have 4000 days of trading with NO losses! 

 

By 2008, many institutional investors, such as Royal Bank of Canada (RBC) started observing that even simple trades were costing them more than before. They started digging into this and uncovered a remarkable truth. It was as if HFT traders were lurking, waiting for them to put out an order and then act on it immediately, almost in a predatory fashion! What was even more frustrating was that they could do nothing about it. Brad Katsuyama, who headed the RBC trading desk at its New York office was determined to get to the bottom of this and with the help of other specialists, narrowed down the cause as being due to HFT companies. This led to his formulation of a process, which would make it fair for everyone and that is how IEX came about. However, more on HFT... I located this excellent description of how High Frequency Trading works on YouTube. It is only 11 minutes long and I urge you to watch it because it will help you understand this article better.

 

For those of you who are interested in knowing the state of US Stock markets today, there is an ongoing investigation by New York State Attorney General's office and by the Commodities Futures Trading Commission in Washington DC on high frequency trading practices. Ben Bernanke, the former chairman of Federal Reserve, announced last week that he is joining Citadel Group, one of the biggest HFT companies, in an advisory capacity. Please note that TD Ameritrade, one of the biggest online trading platform sells all its orders to Citadel Group! If an HFT is willing to buy all the orders from TD Ameritrade, there must be a very good reason. Today, in the US, HFT traders are essentially driving the market. For more, see the diagram below:

 

1. HFT companies pay brokers to buy all their trades (e. g. Citadel Group buys all orders of TD Ameritrade)
2. HFT companies pay stock exchanges huge sums of money to co-locate at the stock exchange in order to minimize the delay in monitoring orders
3. Stock exchanges (since they need to generate profits) pay banks and institutional investors to direct orders their way. Sometimes, it happens the other way too!

Where is the investor in this picture? Was the stock exchange not established so capital could be directed to the company that needs it the most? So why are HFT companies paying brokers and stock exchanges? The answers to these questions can be found in Michael Lewis's book. The explanation is too long for this article. The number of Americans trading in stocks and derivatives has fallen to 52% from 63% about six years ago. The average investor is losing confidence in the market.

 

Now let us see how all this applies to Indian markets. HFTs make money in several ways and here are some of these:

 

1. Front running - In a simplistic way, this is similar to scalping movie tickets. Let us take a real life example... Infosys trades on NSE, BSE and several other exchanges in the country. An institutional investor (II) wants to buy for a mutual fund (MF) company about 10,000 shares of Infosys. The MF company, stipulates that the range of the purchase of the 10,000 shares be between Rs2,150 - Rs2,200. The institutional investor's trading desk runs an algorithm whereby it tries to buy a small lot (since it does not want to reveal its hand) of 100 shares at Rs2,150. Assume that the II is located close to NSE, and therefore the order appears first at NSE.

 

• An HFT, co-located at NSE, picks up this order at Rs2,150 and then tries to gauge the upper limit of the II. It may try selling to the II at Rs2,250 and the II computer will reject it (because it can go only as high as Rs2,200). The HFT computer lowers the price to Rs2,225 and gets rejected again. Then it tries Rs2,200 and II buys the order!

 

• Now the HFT knows the upper bound of the II and will out run the buy request of the II to all the other exchanges and buy up INFY stock and then sell it back to the II, all at Rs2,200, which the II accepts since it does not find any other lower priced shares. All this happens in a matter of milliseconds because the speed at which data runs between exchanges is slower than that of the HF traders.

 

• Who loses out? The investor, who has put money in the mutual fund hoping that they will do a good job of managing his investments.

 

• The profit margin may not be big but if you can do this on EACH and EVERY sale, the numbers do add up and that is what HFTs do.

 

2. Dark pools - Some of the HFTs get both sell and buy orders of stocks and instead of routing them to a stock exchange, do the trading themselves, thereby not exposing the real value of a share in the market. Regulatory bodies will not even be aware of a sale of this kind. There are 45 dark pools in the US, with companies such as Goldman Sachs and Morgan Stanley having at least one such pool.

 

This is not to say that all HFTs are doing this but it behoves the Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) to create a fair trading platform. 

 

My suggestion is to create an exchange designed along the lines of IEX. IEX opened for business in 2013 and now does about 1% of all US stock transactions. They offer only three types of trade - Market, Limit and mid-point.  IEX does not allow co-location nor does it offer any speed benefits for HFTs and therefore levels the playing field. Some of the investors in IEF are Bain Capital Ventures, Belfer Management, Brandes Investment Partners, Capital Group, Cleveland Capital Management, Franklin Resources Inc, Greenlight Capital, MassMutual Ventures, Maverick Capital, Pershing Square, Scoggin Capital Management, Senator Investment Group, Spark Capital, TDF Ventures, and Third Point Partners. 

 

Goldman Sachs announced its support to IEX and even sent some business its way for a few days (Dec 18-19, 2013) before they changed their mind and went back to their (good or bad) ways. Moreover, one more thing - the new exchange (let us call it FAIR - Fair and Intelligent Retail platform) should be located geographically in the middle of the country so as to be equidistant (more or less) to all cities... Did I hear someone say Nagpur?

 

Final Note: If this subject seems complicated, I encourage readers to click on the URLs which have a lot of information. This video stopped trading at US markets as it was playing out!

 

http://www.moneylife.in/article/what-is-high-frequency-trading-and-how-it-affects-you/41351.html

Equities will be highest returner in 2015: Poll

LONDON: Equities will be the riskiest asset class this year and through the next decade, but will also offer the highest returns and attract the biggest allocation boost from investors, a poll predicted on Monday. 

In a survey of more than 11,500 investors by asset management firm Franklin TempletonInvestments, 59 percent said stocks would be the most lucrative investment this year, followed by real estate (55 percent) and precious metals (39 percent). 

Almost a third (32 percent) said they plan to increase their exposure to stocks this year, more than double the number (14 percent) that plan to reduce it, and a higher percentage than those who will increase bond, alternative investment or cash holdings. 

Globally, equities were seen as the riskiest asset class in 2015 and over the next 10 years, according to 35 percent of those polled, closely followed by the euro (34 percent) and non-metal commodities (32 percent). 

The most bullish on stocks were UK investors, 74 percent of whom expect the market to rise this year. 

While stocks were seen as the biggest risk globally, European investors said the euro currency will be their biggest risk in 2015 and over the next 10 years. 

"Views of what constitutes risk vary within the industry, and it's important for investors to have a clear understanding of what risk means to them and how it impacts their portfolios," said Jamie Hammond, managing director, Europe, Franklin Templeton Investments. 

"In today's volatile, low interest rate environment, many investors are looking for actively managed investment solutions that can help reduce volatility in unpredictable markets, while seeking to provide attractive risk-adjusted returns." 

Despite widespread talk of a bubble forming in global bond markets, the survey showed that 28 percent of investors plan to increase their fixed income holdings this year, compared with 16 percent who plan to cut back. 

The biggest improvement in overall sentiment from last year's survey was among Spanish investors, followed by their Chinese and French counterparts. Brazilian investors were the most downbeat compared with a year ago. 

The state of the global economy was the biggest single concern for investors (38 percent), followed by government fiscal policy and the euro zone debt crisis (both 32 percent). 

The survey covered over 11,500 investors in 23 countries across the Americas, Africa, Asia Pacific and Europe.

http://economictimes.indiatimes.com/markets/stocks/news/equities-will-be-highest-returner-in-2015-poll/articleshow/47508622.cms

Roubini: There's a market 'time bomb', risk of a dramatic fall

By Mike Bird
By Business Insider | 2 Jun, 2015, 10.46AM IST

Nouriel Roubini, one of the few prominent economists credited with predicting the 2008 financial crisis, thinks there could be another one just around the corner. Roubini's latest piece in the Guardian is a warning particularly about the low levels of market liquidity:

A paradox has emerged in the financial markets of the advanced economies since the 2008 global financial crisis. Unconventional monetary policies have created a massive overhang of liquidity. But a series of recent shocks suggests that macro liquidity has become linked with severe market illiquidity.

That's a slightly wonkish way of saying that there's just not enough money moving in markets at any one time. That means that small changes in positions can have much bigger changes on asset prices - small corrections become big corrections, and big corrections can become crashes.

Here's Roubini again:

And yet investors have reason to be concerned. Their fears started with the "flash crash" of May 2010, when, in a matter of 30 minutes,major US stock indices fell by almost 10%, before recovering rapidly. Then came the "taper tantrum" in the spring of 2013, when US long-term interest rates shot up by 100 basis points after then-Fed chairman Ben Bernanke hinted at an end to the Fed's monthly purchases of long-term securities.

Roubini calls this a "combination of macro liquidity and market illiquidity" - global interest rates have been cut and cut again, and monetary policy in general remains extremely supportive.

With little liquidity, popular or seemingly sure-bet trades become crowded - until they're not a sure bet any more. When everyone rushes for the exits at once, it can make things extremely volatile:

As a result, when surprises occur - for example, the Fed signals an earlier-than-expected exit from zero interest rates, oil prices spike, or eurozone growth starts to pick up - the re-rating of stocks and especially bonds can be abrupt and dramatic: everyone caught in the same crowded trades needs to get out fast. Herding in the opposite direction occurs, but, because many investments are in illiquid funds and the traditional market makers who smoothed volatility are nowhere to be found, the sellers are forced into fire sales.

Roubini thinks that's a recipe for disaster: "Macro liquidity is feeding booms and bubbles; but market illiquidity will eventually trigger a bust and collapse."

He's not the first person to make this point. Accumen Management director Ken Veksler wrote a couple of months ago about how liquidity has been drying up, particularly in FX. Former US Treasury Secretary Larry Summers and JP Morgan boss Jamie Dimon both agree.

European Central Bank board member Benoit Couere has also expressed concern about the lack of liquidity driving volatile movements in bond markets recently.


http://economictimes.indiatimes.com/markets/stocks/news/roubini-theres-a-market-time-bomb-risk-of-a-dramatic-fall/articleshow/47508673.cms?prtpage=1

Indian Trading League: a high-risk contest

 

Mon, Jun 01 2015. 08 21 PM IST

Indian Trading League: a high-risk contest

Such contests, where real money is at stake, are best left to professional investors and traders

Lisa Pallavi Barbora

Shyamal Banerjee/Mint

It’s not the first time that a brokerage has staged a trading competition. Normally, these happen with virtual money, but discount broker Samco Securities Ltd (Samco) has gone a step further and launched a competition that requires participants to use real money. The competition is soliciting participation from the public at large for an equity and commodities trading challenge. The carrot riding on a high decibel celebrity-driven television advertisement campaign on business channels is a jackpot prize worth `1 crore. In the advertisements, cricket icon Kapil Dev asks you to come play in the Indian Trading League, a take-off on the cricket Indian Premier League (IPL).

Mint decodes the event and drills down to its basics.

The product

The competition is simply about buying and selling equity shares, equity derivatives and currency derivatives, and one of the leagues is meant for competing trades in commodity derivatives. The person who makes the highest return on capital (percentage) till 31 March 2016, wins the grand prize. The winner also gets an opportunity to become a fund manager to manage up to $1 million of Samco’s proprietary funds.

You need a minimum capital of `25,000 to participate. Winners will also be declared every week, month and quarter (the competition started on 19 May 2015 and ends on 31 March 2016). There are four leagues to choose from—investor league, traders league, commodities league and women’s league.

Participants in the investor league can’t invest in derivatives of any kind, and commodity league participants can only invest in commodity derivatives. You can participate in more than one league, separately. For each, you will need a minimum capital of `25,000. Participants in the investor’s league automatically qualify for the trader’s league, and all women participants will qualify for the women’s league.

Prizes for each league differ. While the final winner of the trader’s league gets `1 crore (before tax), the final winner for the women’s league will get 100 gm of gold. To take part, you will have to register and open a trading cum demat account with Samco, the broker organizing the contest.

You can link your existing demat account as well, but operationally, it won’t be as efficient. There are regular costs attached—a flat `20 brokerage per transaction regardless of value; account-opening charges have currently been waived off.

“The objective is to reach out to as many people as possible, to familiarize them with markets and get them on board. When people are faced with a competitive challenge, they are more driven, and learn to keep emotions aside. This will help them make money,” said Jimeet Modi, chief executive officer, Samco.

You can check your ranking in the contest on their website. Winners are announced on periodically on the website.

Unpacking the layers

There are various points that need to be understood before participating in the contest.

Lure of prize money: While a jackpot of `1 crore is enticing, unlike most other public competitions, there is a lot more at stake here. You need to put in a capital of `25,000, for each category that you participate in. If you perform badly, you stand to lose this money, and much more if you are trading in derivatives. Of course, if you win, you make a profit, and get the prize money over and above that.

In this contest, real risk is taken with real money. Some argue that this is more about gaming than trading. Raghu Kumar, co-founder, RKSV Securities, a Mumbai-based discount broker, said, “Some brokers in the US offer virtual money contests to encourage investor participation. But with live accounts and real money, it almost amounts to gambling.” A contest that induces you to risk money with a potential to lose more than you win, can be looked at as a wager.

Over-trading: The prize money seems skewed towards making participants trade for a longer period. The biggest prize is of `1 crore, which is there for only one category—traders league—and can be won after being in the contest for a year. All other prizes are of much lower amounts; the next highest is `10 lakh. Some are 99% lower. For example, winner of the quarterly league contest gets only `25,000. “The focus on winning the competition can lead participants to take higher risks which can increase the odds of making losses.” said Nitin Kamath, founder and chief executive officer, Zerodha.com, an online discount brokerage, which runs a 60-day contest for its users—if you profit from your trades, brokerage is returned. The challenge is a constant reminder that a trader is in the business to profit and not just to trade.

What could be looked at as a conflict of interest is that higher trading frequency from participants will benefit Samco given its discount broking structure where there is a flat fee per trade, as opposed to brokerage that’s paid as a proportion of the investment amount. So, the organiser gains regardless of participants gaining or losing money. The company’s management, however, said the intention is to familiarize more people with equity trading, while keeping costs low for traders. “The discount broking model is more beneficial for traders because regardless of the size of the trade, the brokerage remains flat. We aren’t concerned with the volume of trades; what matters for us is that more people participate,” said Modi.

Uneven competition: The competition doesn’t distinguish between a professional trader and a first-timer. It doesn’t matter if you are a professional equity trader or a homemaker, all participants have to compete together. However, one must be clear that trading is not a game; it requires knowledge of price movements in equity or commodity markets, how earnings and corporate announcements impact market prices of stocks, and many other factors.

“Trading requires not only basic knowledge of equity markets along with technical and fundamental knowledge regarding securities trading, it is also important to know how to hedge risks with derivatives,” said Gaurang Shah, vice-president, Geojit BNP Paribas Financial Services Pvt Ltd. This isn’t something that one can ‘learn’ in less than a year.

The amount invested also matters. “This competition isn’t between people with equal balances and that can tilt the scales. The person with lesser capital will always have greater chances of making higher percentage return,” said Kamath.

Samco representatives, however, said that investor awareness programmes will be conducted to educate participants about “good” trading practices. This, said Modi, will help people reduce the number of mistakes they make and have a higher chance of winning. “Guidelines” of how to trade and invest in the markets have been put up on the contest website. These tell people to be disciplined, follow a plan, have risk management tools and exit strategies in place. There is also a negative list of stocks that are prone to manipulation, and trading in those will lead to disqualification.

But are these steps enough? Who will check how well participants understand this literature?

Attempts to contact the market regulator, Securities and Exchange Board of India (Sebi), through e-mails and SMSs elicited no response.

Mind the markets: Trading gains and losses to a great extent depend on the market conditions and corporate announcements; sudden, sharp moves in the market in either direction can wipe out all gains, or even exaggerate losses. Plus, in most part, trading in markets is a zero sum game, which means if someone is winning then someone else is losing. Both the buyer and seller of a stock or derivative cannot be right all the time.

Mint Money take

Anyone participating in this or other such contests should be well versed with the nuances of trading in equity and commodity markets.

You must also consider the fact that any profits you make will attract short-term capital gains tax. If you are a first-timer in equity, or primarily a long-term investor in mutual funds and stocks, it’s better to stay away. This is essentially a contest for professional traders; others enter at their own risk.

Zerodha Story

Here's how you can really make money in trading

By Dhirendra Kumar, CEO, Value Research

1 Jun, 2015, 12.15PM IST

It's an old saying that in a gold rush, the miners may or may not make money, but those who sell them the picks and shovels get rich. This is certainly true of parts of the stock markets, especially short-term trading by individuals. 

The other day , while reading the story of Nitin Kamath, the man who has set up Zerodha, India's first and largest discount stock broker, I was struck by the fact he is one of those who has gone over from being a gold digger to a seller of picks and shovels. As narrated by Kamath himself, he was trading on the markets since he was 17 years old. However, after receiving two big shocks on the markets, one during the dotcom crash and the second in 2009, he apparently decided to switch from digging to providing shovels to others. 

There's more than a little irony in this story - a man loses big on the markets and decides to get out of trading and creates a business which will help others do the same. However, it perfectly encompasses the experience of practically a good proportion of individual traders on the Indian equity markets, the negative impact being specially amplified by the fact that their activity of choice is highly leveraged derivative trading. 

Typically, they make profits for short runs and then make large losses, all amplified by the lever aged nature of their trading. 

In fact, it is interesting to see that there is a competition called 'The 60-day challenge' on the Zerodha website, which customers can participate in. All it takes to win this challenge is to not make a loss over 60 days. That's it. 

If you come out profitable (any profit at all) at the end of the 60 days, then you've done it --you've cracked the challenge. To the uninitiated like me, this appears to be an astonishingly low qualifying level for an activity whose only goal is supposed to be to earn money, but then I suppose that it must be rare n achievement. enough to be an achievement. 

As it happens, Sebi is reportedly trying to limit derivative trading among individual traders. A few days back, there was a report in this newspaper about the Sebi planning to increase the contract size in futures and options trading on the stock exchanges.For the last 15 years, the contract size has been Rs 2 lakh. Reportedly, Sebi now wants it increased to Rs 10 lakh. 

The contract size governs the minimum ticket size that a futures or options (F&O) trade has to be. By increasing the contract size, Sebi would like to ensure that, only richer traders would trade in F&O segments. 

And why would Sebi want to do that? Clearly, an overwhelming number of individual traders are regularly losing their shirts in derivatives trading. As the logic of trying to limit trading to those who can afford trade with larger amounts, I'm sure it isn't because they are better at making money. Instead, it is the traditional idea that it's OK if richer people lose money on the markets but the small investor must be kept away from risky activities. Maybe there really is something to this line of thinking. 

Obviously , brokers and stock exchanges are strongly opposed to what Sebi has proposed as it means lower revenue and profits or them although their official reasons talk about market liquidity etc. Of course, derivatives which are generally called deffendo in India, which makes them sound like a magic spell from the Harry Potter books) have no inherent connection to discount broking.

Discount brokers like Zerodha (and now others too) charge Rs 20 per trade instead of the traditional percent brokerage. If someone is offering lower cost for the service, then that's fine. 

If the discounters are doing well, then traders must be finding their barebones services to be good value. It's the larger question of what role derivatives are playing in the Indian markets, that's the real concern.

http://economictimes.indiatimes.com/markets/heres-how-you-can-really-make-money-in-trading/articleshow/47497621.cms

Online low cost brokers like Zerodha and Tradesmart give traditional brokers a run for money

MUMBAI: Similar to e-commerce retailers, online low-cost brokers are slowly but surely making their presence felt. The discount broking industry, running on shoestring promotional budgets, is primarily dependent on word-of-mouth or online publicity, but the growth potential is turning the firms aggressive. At least one discount broker has roped in private equity investors and a high profile brand ambassador to plan a media blitzkrieg. More could follow.

These intermediaries, offering services online, attract day traders and punters with rates that are way below those charged by traditional brokerages who depend on the more expensive relationship manager-based model. For instance, the traditional broker would charge Rs 100 as fee for one lot of Nifty options as against Rs 15-20 charged by a discount broker.

"Discount broking industry is still at a nascent stage in India with very low awareness, but has huge potential for high growth," said Vikas Singhania, executive director of VNS Finance, which owns the discount broking platform tradesmartonline.in.

"Discount broking industry's share has grown from 3-4% of average daily turnover 3 years ago to nearly 11% now, which underlines the growth potential," he added. Tradesmart has grown nearly 3 times in last one year

Notwithstanding the growth potential, small budgets have prevented the industry from splurging on promotional activities. "In a discount model, for example, in airlines industry, top 1-2 players make money, while others struggle. The same is happening in the discount broking industry today," said Nithin Kamath, founder and CEO of Zerodha, which is the market leader with over 60% share and 56,000 clients.

Zerodha, too, depends on word-of-mouth publicity. And, it runs 60-day trading contests for its clients rewarding those who remain profitable.

"To make sure that traders don't get carried away by low cost and overtrade, we have this initiative called '60-day challenge'. If anyone taking the challenge is net profitable after 60 trading days, we refund the entire brokerage paid," said Kamath.

Satish Kumar Dutt, CEO and MD of Compositedge, also said that his firm grew 200% in the past one year, yet the Budget for promotional activities remains as low as Rs 9-12 lakh an annum. AsthaTrade, another discount broker, focuses only on online advertising on websites frequented by traders.

"We are targeting websites which attract traders in order to have a higher conversion ratio. We continuously roll out promotional offers to targeted customers to increase client base," said Satish Chandra Gupta, co-promoter of Astha Credit and Securities.

Amid this, the Mumbai-based discount broker SAMCO Ventures is roping in PE investors and former Indian cricket legend Kapil Dev as brand ambassador to launch 'Indian Trading League' (ITL) in which any stock trader can participate.

ITL, a separate entity formed to host the event, would give away prizes to the best performer every week and every month, with Rs 1 crore to the winner for the whole year. Jimeet Modi, CEO, SAMCO Ventures said the league will be launched this month but declined to share more details.

According to a person involved in the project, Siddharth Mehta, founder of PE house Bay Capital, is acquiring 7.5% in ITL, valuing the outfit at Rs 100 crore. Deloitte India will audit the systems and processesto improve transparency and investor confidence.