Badla trading nostalgia has nothing to justify it

The claim that this pre-2001 device to carry trades forward kept India's stock market safer from manipulation is spurious. Separate derivative trading is not flawless but far better

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The Jane Street episode seems to have stirred some 20th-century nostalgia, with badla trading—banned in 2001 after the Ketan Parekh scandal—posited as an answer to stock-market manipulation. Badla was an indigenous mix of cash and forward markets. It allowed traders not to settle their trades within the timeframe they were meant to be settled on a cash basis, but carry them forward by paying a small badla fee for that benefit. What replaced it was the global practice of using derivatives like futures and options (F&O), contracts that let traders hedge their bets or speculate on future price movements. Fans of badla argue the stock market back then had such large volumes and high liquidity that big-money players could not expect to push stocks up or down as part of a game. In a market marked by low supply of free-float shares, with vast chunks of equity held by company promoters, the split-up of trading into cash and F&O segments has enabled outsized gains in the latter through price-moving trades in the former. Or so goes the arg