Tejas Khoday, CEO & Co-Founder, FYERS

Tejas Khoday is the Co-Founder & CEO at FYERS and is counted among the youngest professionals to get the NSE’s broker license. He has over 10 years of experience in proprietary trading, risk management, and broking. Tejas and his team started FYERS, a technology-focused brokerage in 2014 with an aim to transform the trading/investment ecosystem in India.


Off late, in the backdrop of the Corona Virus Pandemic and the ensuing lockdowns across many countries, we are hearing a growing clamour to completely shut stock market operations world-wide. There are two reasons backing the shutdown – adherence to the guidelines initiated by respective governments’ over the pandemic and to arrest the precipitous fall in prices of stocks and indices.

Based on this notion, the Philippine stock market initiated a 2-day shutdown and the result? As trading resumed on 3rd day, the index opened with a 24% loss and posted its biggest intraday loss in 33 years, one of the worst performers among Asian countries. Finally, the Philippine Securities and Exchange Commission informed that all stock trading activities will be conducted remotely while extending 100% support to the lock-down.

Let’s take a look back at what is the function of a stock market in its simplest term. It is an exchange that enables buyers and sellers to negotiate prices and conclude trades according to their perception and the underlying value of a financial asset. Hence, shutting down an exchange would defeat the purpose of its establishment, prohibit the investors from completing these transactions and hinder the price discovery of the financial assets being held, which could lead to harsh losses. While the value of each human life is immeasurable and irreplaceable, with technological advances and a wide array of communication channels, the transactions could still be facilitated, under the safety of remote locations/operations.

To control the spread of Corona Virus, our honourable Prime Minister after careful consideration and in coordination with various institutions decided to put the country under a 21-day lockdown of ordinary services and activities. This is an excellent and much-required directive to safeguard the health of the people in India. At the same time, this directive also provides for certain exemptions, like essential commodities, health services and continuation of banks and stock exchanges, albeit, through a skeletal staff. I am sure that the wise men, in government administration and from other quarters, would have advised what is appropriate for India and can be safely concluded that, shutting down stock exchanges was definitely not one of them.

The reduction of trading hours for Commodities Exchange MCX between March 30 and April 14 will have an effect on exporters, importers, traders in the physical markets as well as banks. Normally, activity on MCX is higher post 7 pm each day, coinciding with the trading hours in the US which commences after 7 PM.  Closing the exchange at 5 PM is akin to exposing investors to an overnight risk and seizing their ability to hedge positions efficiently. This move will also result in reduced volumes and liquidity, which cannot be considered helpful.

What are the issues that can arise due to shut down of stock exchanges / financial markets?

Free flow of capital is essential and in distress times, investors do look to safeguard their capital by reducing risky assets by opting for safer or alternate investment avenues. The issues are different for different stakeholders. For retail investors who have invested their monthly savings through mutual funds, to promoters who have raised capital through Loan Against Shares (LAS) facility, to lenders whose margin limits are being breached, to new promoters who want to raise capital through an IPO/FPO – liquidity and flow of capital will be denied completely, which is against the ethos and the true objective of a stock exchange.

In the current globalized world, stock markets and investors worldwide are interconnected and any negative trigger in a stock market of a country could have a domino effect on other exchanges throughout the world and plunge global markets into an unwarranted and serious financial distress. The closure of the Philippine stock market and the ensuing losses proved that shutting stock markets is not a credible or affordable solution, not just for India but for any stock exchange across the world. FII/FPIs have a total investment of around 30 lakh crores in India. These institutional investors have been selling continuously over the last three months and it has been a steady and composed exit. Any whiff of the closure of markets may trigger an uncontrolled panic selling, which could hurt market capitalizations of blue-chip companies, decimate smaller companies and extinguish the net worth of many investors, mainly retail investors.

Bottomline – Moratorium on loans is possible, not on stock prices or stock markets. They are the lifeline of any country’s financial system and must go on but from the confines of a safe environment. In conclusion, I would differ with the view of shutting the stock markets, not only in India but anywhere in the world, but echo the words of RBI Governor Shaktikanta Das: “Stay safe, stay clean and go digital!”


More about FYERS and Tejas Khoday

FYERS, a technology-focused stock-broking firm, is the pioneer of leading trading platforms in India. With a strong community of traders and investors, FYERS is currently powering more than 30,000 customers to trade seamlessly, across all major Indian exchanges including – NSE, BSE & MCX. In a span of 6 years, FYERS has emerged as a leading tech-enabled trading platform in India. Tejas’s deep domain knowledge has gone a long way in transforming the trading/investment landscape for investors by developing and scaling a world-class trading platform at FYERS. 

Along with his team, Tejas has played a crucial role in setting up and developing unique trading opportunities such as FYERS Free Investment Zone, FYERS 30-day challenge, FYERS Web and thematic investment.

Tejas holds a Bachelor’s degree in Business Administration and Management with a major in Finance from Bhagavan Mahaveer Jain College, and a Post Graduate Diploma in Finance from Indian School of Business and Finance. He also holds a level 1 finance and investments Grade A certificate from CFA (Expand the acronym) Institute.

Besides his work, Tejas invests his time in a strict fitness regimen and also loves to spend his time with pets.

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