India’s Retail Leverage Shifts From Options To Slower MTF

Fewer Indian investors are trading equity derivatives, such as futures and options.

Their total losses have gone down, but the average loss for each remaining trader has risen.

At the same time, more investors are borrowing money to buy and hold shares through Margin Trading Facility, or MTF.

This means people may be moving from fast, short-term bets to slower, borrowed investments.

MTF gives investors ownership of shares, but they pay interest on the money borrowed.

If a share does not rise, the interest still keeps adding to the cost.

Risk can be greater when borrowed money is used on smaller or less-liquid stocks.

Regulators are proposing rules to strengthen brokers and improve reporting.

The article says trading platforms should clearly show how much holding a position will cost before investors buy.