Most investors are safer staying off derivatives

They should heed Sebi chairperson Madhabi Puri Buch's advice and invest money for the long-term. Dallying with futures and options is way too risky and this needed to be flagged

- 

The Securities and Exchange Board of India (Sebi) is evidently worried about high retail participation in the derivatives segment of equity markets. Chairperson Madhabi Puri Buch's remarks on Monday reflected this concern. "I must admit, I am always a little confused and surprised as to why people continue to [trade in futures and options], knowing that the odds are not in their favour at all," she said. Indeed, too many have joined the F&O game in recent times and it is unlikely they have fully grasped the risks they are taking for the rewards sought. A recent Sebi study revealed that the number of unique individual F&O traders swelled by over 500% during the pandemic from just 710,000 back in 2018-19. A wave of enthusiasm for equity trading was attributed to people being stuck at home with extra time and money. In general, this should have pleased any regulator keen to see more folks participate in capital markets.