TAMING THE F&O BEAST
Business Today India|1st September 2024
THE SURGE IN F&O TRADING AMONG INDIA'S INVESTORS HAS LEFT THE GOVERNMENT, REGULATORS AND STOCK EXCHANGES GRAPPLING WITH A NEW CHALLENGE. WHO WILL PRICK THE BUBBLE?
Anand Adhikari
TAMING THE F&O BEAST

SURGING F&O TRADES

• As many as 122 million demat accounts have been opened since April 2020, of a total of 158 million till May 2024

• The younger generation, with access to apps and easy research, has appetite for risk and wants to get rich quickly

• It helps that discount brokerages offer zero brokerage fees and lending facilities

• Influencers sell options strategies via YouTube, WhatsApp, and Telegram, offering different models, such as subscription-based

• Options offer lower entry costs and higher leverage compared to futures and cash market trading, and brokers are marketing such products to clients

• F&O offers a hedging tool for sophisticated investors

• Exchanges have started pushing volumes by offering weekly options contracts, with expiries every day

• Entry of algorithmic or high-frequency trading is driving volumes

IT IS CALLED fatal attraction. A bug is attracted to a light source even though it could be the death of it. Among humans, it is often the thrill of doing something dangerous. For instance, some people indulge in death-defying stunts; some undertake perilous expeditions; some have addictions that are injurious to health; and some gamble away their financial future.

What else explains the fact that there has been no let-up in the popularity of Futures & Options (F&O) trading in India despite investors being met with a blunt warning when they log into their trading accounts? The warning goes: "90% of people are making losses in Futures & Options trading. The average loss is ₹50,000 per client." It is reminiscent of the health advisories on cigarette packs. And like cigarettes, F&O trading can be addictive, when investors, like smokers, disregard the warning, which could lead to financial ruin.

この記事は Business Today India の 1st September 2024 版に掲載されています。

7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。

この記事は Business Today India の 1st September 2024 版に掲載されています。

7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。

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