3 days ago

Why Some F&O Traders Survive While Others Lose Money

The difference between traders who survive F&O and those who don’t · livemint.com

Futures and options, or F&O, let people make trades based on how prices may change.

Many more everyday investors in India are now using these products.

But these trades can be risky and complicated.

SEBI found that most individual traders lost money over three years.

Some traders buy cheap options hoping for a quick, large profit.

These options can lose value because prices may not move as expected and time passes.

Experienced traders limit how much money they risk on each trade.

They also use planned exits, stop-losses, and careful analysis instead of guesses or online tips.

Protecting money and accepting small losses can help traders stay in the market longer.

Key facts

Individual traders in FY22: Approximately 48 lakh
Individual traders in FY24: More than 1 crore
Individual loss rate: 93% of individual equity-derivatives traders lost money between FY22 and FY24
Aggregate net losses: More than ₹1.8 lakh crore over FY22-FY24
Recommended risk approach: Limit exposure to a small fraction of trading capital per trade
Key trading tools: Multi-leg strategies, Greeks analytics, bracket orders, trailing stop-losses, and automated daily loss limits
Main discipline principle: Protect capital first and follow pre-planned exit and stop-loss rules

livemint.com · 3 days ago