The Securities and Exchange Board of India (SEBI) has highlighted the significant risks associated with Futures and Options (F&O) trading, particularly for retail investors. A recent study revealed a substantial increase in individual traders, with a vast majority incurring net losses. SEBI plans to implement additional safeguards and enhanced risk disclosures by brokers and exchanges.
Securities and Exchange Board of India (SEBI) on 25thJanuary,2023 has issues a Press Release vide PR No.02/2023 and has underlines the need for analysis and disclosure of risks of trading in FO. SEBI plans to impose additional safeguards for retail investors dealing in the futures and options (FO) s
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FAQ :
SEBI is emphasizing the importance of analysis and disclosure of risks associated with trading in Futures and Options (F&O).
A major finding was that 9 out of 10 individual traders in the equity F&O segment incurred net losses in both FY 2018-19 and FY 2021-22.
Loss makers registered an average net trading loss close to Rs. 50,000 in FY 2021-22, with about 90 per cent of active traders incurring losses averaging Rs 125,000.
The study found a significant disparity, with the top one per cent of traders accounting for nearly 51 per cent of the total net profit earned.
SEBI plans to impose additional safeguards for retail investors and will shortly issue guidelines for enhanced risk disclosures by brokers and exchanges.