New Delhi: Stock Market investor Vijay Kedia on Thursday expressed concern over Futures and Options (F&O) trading. Ace investor Kedia has repeatedly raised the positives and negatives of F&O trading, and cautioned the new investors who are very new to the stock market investing.
Expressing his views on F&O trading on X, Kedia seemed to be unhappy with the retail investors as he stated that the retail is turning the market into a casino. He advocated for license trading rather than any person with a demat account getting into Futures and Options (F&O) trading.
“F&O was meant for hedging, not hoping — but retail’s turning the market into a casino.
Maybe it’s time we ask: should access come with a license, not just a login?
Over 90% of retail traders lose money in F&O.
This isn’t risk management — it’s just gambling, masked as strategy.
We may call it a hedge, but the data calls it a warning,” Vijay Kedia posted on X.
93% of Individual Traders Incurred Losses in Equity F&O
According to a report published by the Securities and Exchange Board of India (SEBI) in September 2024, the market regulator mentioned that 9 out of 10 individual traders in the equity F&O segment continue to incur significant losses. The figures showed that individual traders lost more than Rs 1.8 lakh crores over the three-year period between FY22 and FY24.
The key findings of the SEBI report mentioned that 93 percent of over 1 crore individual F&O traders incurred average losses of around Rs 2 lakh per trader from FY22 to FY24.
Around 4.5 lakh traders faced an average loss of Rs 28 lakh per person in the above-mentioned time period.
The market regulator’s report revealed that only 1 percent of individual traders managed to earn profits exceeding Rs 1 lakh, after adjusting for transaction costs.
What is Futures & Options
Futures and options are the major types of stock derivatives traded in the stock market. These stocks are traded after contracts finalised by two parties for trading a stock asset at a predetermined price on a future date. With prices set in advance, the contracts try to mitigate market risks involved in stock market trading.
Securities Transaction Tax (STT) on sales of futures in securities is fixed at 0.02% of the price at which such futures are traded. The tax on the sale of an option in securities is 0.1% of the option premium.
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Ace investor Vijay Kedia voiced concerns about the escalating risks in Futures and Options (F&O) trading, particularly for retail investors. He highlighted alarming statistics showing a significant majority of retail traders incurring substantial losses. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
