Avoid F&O trading without strict position sizing, stop-losses

Closing SIPs during downturns hurts rupee-cost averaging, long-term compounding

- SANJEEV SINHA

Markets offered opportunities in 2025, but many investors struggled as decisions were driven by speed, noise and emotion rather than understanding.

From chasing hot themes and speculative trades to stopping systematic investment plans (SIPs) during volatility and following unverified advice, behaviour often proved costlier than market movements.

As investors step into 2026, the lesson is clear: Successful investing depends more on discipline than speed. Experts point to key mistakes made in 2025 and outline how investors can avoid repeating them.

Losses in F&O segment

A recent report by the Securities and Exchange Board of India (Sebi) showed that individual traders suffered net losses of ₹1.05 trillion in the futures & options (F&O) segment in FY25. Sebi and market experts attribute losses to speculative trading by largely inexperienced investors. High leverage, transaction costs, and volatility combined to magnify losses. While steps taken by the regulator reduced retail investor participation to some extent, the problem remains.

Mistakes to avoid

Excessive leverage remains the most damaging mistake in F&O trading. “Small margins can control large positions, but even minor price moves or time decay can wipe out capital quickly. Trading without strict position sizing, stop-loss discipline, or a clear exit plan almost guarantees losses. Chasing tips, reacting to intraday noise, or assuming frequent trading improves outcomes are equally damaging habits,” says Arun Patel, founder and partner, Arunasset Investment Services.