SEBI Chairman Tuhin Kanta Pandey has cautioned retail investors about the risks of reckless trading in Futures and Options (F&O), urging them to focus on responsible investing and financial literacy.
Speaking at the World Investor Week 2025 event organised by the National Stock Exchange (NSE), Pandey said that most retail investors trading in derivatives suffer losses because they do not fully understand the risks involved.
“Our studies show that a majority of retail participants lose money in derivatives trading. These products are designed for hedging and risk management, not for quick profits,” he said. “Investors must evaluate their risk capacity, learn how derivatives work, and avoid speculative trades.”
Need for Financial Awareness
Pandey emphasised that while SEBI can offer investor protection tools, the most effective safeguard is financial awareness. “A smart investor depends on credible and verified sources, not on unsolicited advice from social media,” he added.
Findings from SEBI’s Investor Survey
Alongside his remarks, SEBI released findings from a new nationwide Investor Survey conducted with Market Infrastructure Institutions (MIIs) and AMFI, covering over 90,000 households.
The survey found that while 63% of Indian households are aware of at least one market product, only 9.5% actively invest. Moreover, just 36% of investors have high or moderate market knowledge.
“This knowledge gap exposes investors to unnecessary risks and makes them vulnerable to fraud,” Pandey warned.
Rising Threat of Online Scams
The SEBI chief also raised concerns about online frauds targeting investors. “Unsolicited messages, fake trading apps, and misleading finfluencers are exploiting digital platforms to deceive investors,” he said. “They promise guaranteed returns – something no market can ever assure.”
Bottom Line
Pandey’s message serves as a strong reminder for retail investors to invest wisely, understand financial products, and rely only on verified sources for market information.
Be First to Comment