Pankaj Balani & Abhishek Kar on Crypto F&O Trading, Taxes & Future of Crypto derivatives in India

Finance-Focused Summary (Crypto Derivatives, Trading Workflow, Taxes, Risks)

Market / Business Context

• The speakers discuss building and trading crypto futures and options in India.
• They emphasize that crypto derivatives are needed for:
  • Hedging
  • Price discovery
• They describe futures and options as being provided under a futures–options umbrella.
• They claim Delta Exchange launched globally first, then launched in India, tailoring the product to India’s regulatory and banking/payment realities.
• They position the platform as INR-settled, meaning users typically don’t need to hold crypto for margin or settlement.
  • Funds are kept in Indian bank accounts, reducing exposure to “foreign” crypto custody and associated risks (e.g., hacking/custody risk).

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Platform Mechanics & Trading Framework (As Described)

Funding / Deposits & Transfers

• Supported rails include:
  • UPI
  • IMPS
  • NEFT
  • RTGS
• The speakers describe transfers as instant/fast for UPI/IMPS, and fast for RTGS/NEFT.
• The platform supports INR-only operations:
  • Users transfer funds via bank account to add funds.
• They contrast this with other flows where users might buy USDT first, arguing that it introduces:
  • Slippage/commissions
  • Additional crypto price risk

Trading Instruments

• Futures
  • Futures are available on Bitcoin and other cryptocurrencies.
  • “24 cross” is referenced (appears to mean futures/perpetual-style continuous trading terms, though wording is unclear).
• Options
  • Options provide an options chain (calls/puts).
  • Users can select:
    • Expiry
    • Option selection based on Greeks
  • Greeks mentioned include:
    • Delta
    • Gamma
    • Vega
    • Theta

Risk Controls & Order Types

• Futures / positions support advanced order controls such as:
  • Stop Loss Market
  • Stop Loss Limit
  • Take Profit
  • Trailing stop
  • TP/SL (TPSL)
  • Bracket / basket-like structures (referred to as Basket/Bracket)
• Options support custom risk controls:
  • Take profit / stop loss using a trigger price concept (described with “trigger index vs market,” though subtitle details are unclear).

Leverage & Margining

• Leverage is flexible (not fixed):
  • Examples mentioned: 1x, 2x, 3x, 4x, 5x, 10x
• Per-contract leverage limits are shown:
  • Example cited: max leverage up to 20x for a specific contract.
  • More volatile assets may have lower leverage.
• Margining modes discussed:
  • Isolated margin
    • Positions do not interact with other positions.
  • Portfolio margin
    • Positions/strategies can share margin benefits across hedges/spreads
    • Example use case: call spread

Strategy Building (Options)

• A strategy builder lets users compose multi-leg option strategies.
• Example structure described (call spread–like):
  • Sell a call at one strike
  • Buy a call at another strike
• The interface shows:
  • Payoff profile
  • Max profit / max loss
  • How payoff changes over time/expiry

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Key Numbers / Claims Mentioned (Units Often Unclear)

Trading Volumes / Liquidity Claims

• Delta Exchange subtitle claims:
  • Options past week volume: “10.5 billion” (unit unclear)
  • Futures volume: “1.6 billion” (unit unclear)
  • “Trading volume range: ‘16000 to 177000 crore days’” (subtitle garbled; meaning unclear)
  • Daily trading volume: “two billion dollars” (speaker’s platform claim)
• Global context estimate:
  • ~$200B daily crypto trading (speaker estimate)

Risk / Volatility Metrics (Example)

• ATR-based scalping:
  • Uses ATR of 15-minute candles
  • Average of 14 periods
• Mentions Bitcoin moving around “280d” (unit unclear; likely volatility/ATR-style metric).

Option Expiry Timing

• India-time expiry explicitly referenced as 5:30 PM (5:30 baje).
• Expiries referenced include:
  • 1-day, 2-day
  • Up to weekly/monthly
  • Extending to end of January / March (as referenced)

Contract / Quote Sizing Examples (Garble Present)

• Mentions BTC context around 97,000
• Mentions strike levels like: 95,400, 96,000, 97,000, 98,000
• Mentions a break-even around 1660 (exact mapping unclear due to subtitle errors)

Fees / Promotions

• Claims “lowest fees among Indian players” with very low maker/taker basis points (basis points garbled).
• Mentions a scalping offer:
  • If positions are closed within 15 minutes, then no closing fees (entry/exit fee details are garbled, but the main idea is “no exit/closing fee” within the window).

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Crypto Derivatives Tax Implications in India (As Described)

The speaker explicitly says this is not tax advice and advises consulting a CA.

Claimed Tax Treatment Framework

• TDS on selling crypto: described as “1 TDS will be deducted” (likely TDS @ 1%, though subtitles are unclear).
• Trading profits:
  • Treated as business income
  • Example logic used: “profit of Rs. 30 taxed at Rs. 30” (illustrative example)
• Loss handling:
  • Subtitles are unclear on exact phrasing, but later they mention losses can be considered via net taxable income logic.
• Futures/options treated like underlyings (index-like)
  • The derivative is described as “Bitcoin index/underlying.”
  • The argument: physical holding of crypto isn’t necessary.
• Speculative income classification
  • They state derivative gains can be treated as speculative income,
  • Then added to total income and taxed per tax slab, subject to set-off rules.
• Loss carryforward:
  • Mentions carry forward losses for up to 4 years.

Legal Anecdote (Details Unclear)

• A case is referenced where an investor reportedly put ~₹56 million into Bitcoin and claimed long-term capital gains.
• The department allegedly changed the treatment afterward; “justice” was reportedly received (details are unclear due to subtitle issues).

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Explicit Recommendations / Cautions

• Leverage warning
  • “Don’t take too much leverage.”
  • Leverage should match your risk tolerance (“IR tolerance” referenced in subtitles).
• Risk discipline
  • “Cut your losses”
  • “Don’t run time losers”
  • Use tools like:
    • Stop loss
    • Take profit
    • Trailing stop
  • Avoid emotional decision-making.
• Liquidity & execution
  • Emphasize speed of transfers.
  • Avoid an extra conversion step like INR → USDT → margin due to:
    • slippage/commission
    • extra crypto price risk

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Disclosures / Disclaimers

• The speaker states he is not a tax expert and advises consulting a CA for tax positions.
• A clear “not financial advice” line is not explicitly visible in the subtitles, but the tax disclaimer is explicit.

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Extracted Instruments / Assets / Entities

Instruments / Assets

• Bitcoin (BTC)
• USDT (mentioned as a contrast flow)
• LUNA (referenced around the 2022 crash; also mentions TerraUSD)
• Ethereum and other coins
• Solana (SOL) is likely referenced as “Salana” (subtitle garbled)
• TradingView (charting platform; not an instrument)

Regulatory / Entities (Not Tickers)

• FIU / FIU-IND (regulatory body referenced)

Payment Rails

• UPI, IMPS, NEFT, RTGS

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Key Presenters / Sources Mentioned

• Pankaj Balani
• Abhishek Kar
• Delta Exchange (CEO/representative role mentioned; no additional clearly identified third parties)