New Delhi2 years ago
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The number of individual traders in FY 2022 has increased by more than 500% compared to FY 2019. 90% of active traders suffered an average loss of Rs 1.25 lakh during this period. This was said in the report published by SEBI on January 25, 2023 regarding profit and loss in F&O of individual traders.
‘Any uncontrolled explosion of retail trading in F&O could pose future challenges not only for the markets, but also for investor sentiment and household finances. We want to keep it safe and make sure that happens. Finance Minister, Nirmala Sitharaman had said this at an event in May 2024.
Youth are losing lakhs of rupees in speculative trade ‘The capital markets regulator is “forced” to warn against speculative bets in the F&O segment as it is no longer an investor’s micro issue but has become a macro issue of the economy. Household financial savings are going into speculation. The youth are losing lakhs of rupees in such trade. SEBI Chairperson Madhabi Puri Buch said this.
Nilesh Shah of Kotak Mutual Fund also said that F&O activity is affecting both micro and macro levels. Savers have become speculators instead of investors. Micro issues means AC problems that only affect you. There are macro problems that affect everyone.
Increase in retail participation in F&O is not good These statements and SEBI’s research report show that increase in retail participation in F&O is not good. In such a situation, the government can categorize F&O trading as ‘speculative’ income in Budget 2024. Tax may also be imposed on this at the rate of 30%.
High risk, high profit investments are speculation Speculation is a financial term related to buying an asset (commodity, good or real estate). This asset has a risk of losing value, but also has the potential to gain value in the near future. These are high risk, high profit investments made for short periods of time.
What are futures and options? Futures and Options (F&O) are a type of financial instruments that allow an investor to take large positions in stocks, commodities, currencies with less capital. Futures and options are a type of derivative contracts that have a fixed term.
Within this time frame, their prices change according to the stock price. Futures and options on each share are available in one lot size.
Source: www.bhaskar.com
