F&O gamble: 5 reasons why options trading is a losing game for retail traders
India TodayIndia’s derivatives market has been witnessing unprecedented growth, with retail participation soaring from 5.1 million in FY22 to 9.6 million in FY24. Dr. Jayatu Sen Chaudhury, Professor of Financial Analytics at Great Lakes Institute of Management, cited a recent study conducted by the Securities and Exchange Board of India to highlight the fact that “for most retail traders, options trading is a losing game”. It may be noted that the Sebi study revealed the stark odds faced by retail traders, with 93% incurring net losses between FY22 and FY24, collectively losing over Rs 1.8 lakh crore in three years. KNOWLEDGE GAP A lack of understanding of options Greeks and advanced trading strategies like spreads or straddles hampers retail traders' ability to manage risk effectively. WHY RETAIL TRADERS RARELY WIN For retail traders, the odds of success are stacked against them due to: High Costs: Annual transaction costs per trader average Rs 26,000, significantly eroding potential profits.
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