Business
Archived — This article has been archived. The information may be outdated.
Ex-SEBI member says 90 percent of retail traders lose
The Hindu BusinessLine··13 Sept
Former SEBI whole-time member Ananth Narayan told Hindu BusinessLine that about 90 percent of individual derivatives traders lose money annually. He put average losses near Rs 1.2 lakh. Aggregate retail losses run around Rs 1 lakh crore a year. Derivatives notional volumes reach 300 to 400 times cash markets monthly. Index option expiries sometimes hit 700 to 800 times cash.
Prism
What It Means For You
- Retail traders considering index options on expiry weeks face heightened volatility versus cash equities.
- Households budgeting trading capital should weigh published loss rates before levering monthly income.
- Brokers marketing F&O products may face sharper client questions after public loss disclosures.
What's Happening
- Narayan oversaw disclosures on the Jane Street probe and retail F&O risk data during his SEBI tenure.
- He said roughly one crore individuals participate in a market where nine of ten lose.
- SEBI's first consultation paper on F&O concerns arrived around July 2024.
SEBI data on F&O traders
- India's F&O participation surged after cheap broking and mobile apps expanded access.
- Regulators have published loss statistics to inform debates on position limits.
- Index option open interest spikes on some expiry days relative to underlying cash volume.
all-news
