SEBI is worried...

'How to make 1 crore from 1 lakh in 1 day through options trading'.

The YouTube video promises "financial independence" and generously shares "strategies" and "tips" for FREE.

It sends chills down my spine.

Again!

Millions of unsuspecting Indians will be hooked by the promise, greed will take over, become a channel follower, open a demat account (as suggested by the influencer because 'he knows better') and plunge into the highly complex world of derivatives...to be slaughtered.

Sometimes, ignorance is truly bliss.

But, who am I to judge?

It's a free country and you are welcome to spend your (own or borrowed) money as you wish.

But, as per a recently published report by SEBI, the capital market regulator, you are taking a HUGE RISK. Below are some interesting and shocking findings:

• The number of individual equity F&O traders has jumped by a mind-boggling 500% in the last 5 years (FY18-19 - FY21-22).

• 90% (9 out of 10)  of active traders lost Rs 1.25 lakh on average in FY21-22.

• >80% male (Hmm...interesting!)

• 19% from tier II and tier III cities.

• 1% of traders corner 51% of the profit.

• 35% of F&O traders in the age group of 20-30

This risk disclosure by SEBI is a welcome step in the right direction and we expect more guidelines from the capital market watchdog to protect retail investor interests.

SEBI is doing its job but what can you do?

First, remember, this is a zero-sum game. For you to win, someone has to lose. There is no prize for participation (like the sports day events at school when we were kids)

But, losing in this game is very easy (9 out of 10 lose) and very few wins (1% of traders corner 51% of equity F&O profit and 5% of traders account for 75% of the profit)

As per the Oxford dictionary, one meaning of 'sucker' is "a gullible or easily deceived person."

If you don't like the adjective to define you, be mega careful and think 10/100/1000 times before entering the promised land of derivatives. 

Image courtesy: Dall.E2 from OpenAI