The chairperson of the Securities and Exchange Board of India (SEBI) Madhabi Puri Buch, in a recent statement at a BSE event, conveyed confusion and surprise regarding the persistent investor engagement in futures and options (F&O) trading. The Sebi chief acknowledged the unfavorable odds, stating, “There is a 90% chance that the investor will lose money in the F&O segment.”
Citing a Sebi-conducted research, she revealed that only 11% of the 45.24 lakh individual traders in the derivatives segment managed to turn a profit. The study underscored a stark reality as it disclosed that nine out of 10 individual trades in derivatives resulted in net losses.
Despite these alarming statistics, the Sebi chief urged investors to adopt a long-term view of the market, emphasizing that such an approach rarely goes wrong. She highlighted the potential for wealth creation over time, surpassing inflation rates in the economy, and achieving a real rate of return on investments.
Despite these alarming statistics, the Sebi chief urged investors to adopt a long-term view of the market, emphasizing that such an approach rarely goes wrong. She highlighted the potential for wealth creation over time, surpassing inflation rates in the economy, and achieving a real rate of return on investments.
The Sebi chairperson’s remarks took place during the launch of the Investor Risk Reduction Access (IRRA) platform at BSE, indicating a broader initiative to address and mitigate risks associated with trading in financial markets. The statements serve as a reminder of the importance of informed and strategic investment decisions, especially in high-risk segments like F&O.
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