NSE chief asks investors to avoid pitfalls of high-risk derivatives

Last month, Sebi chairperson Madhabi Puri Buch stated that she was 'confused and surprised' at investor interest in Futures and Options despite 90 per cent of individuals losing money in the segment

The National Stock Exchange (NSE) chief Ashishkumar Chauhan on Friday cautioned investors against high-risk derivatives or frequent trading in the stock market.

"Avoid the pitfalls of high-risk derivatives or frequent trading in the stock market. Be a committed participant in India's growth story, and pave the way for a brighter future. Long term investments usually yield better results based on past experiences," the exchange's MD and CEO Chauhan said in a message to investors.

At the same time, he asked investors to deal only with registered intermediaries and never invest in unregulated products.

"Investment through the stock market is meant for long-term wealth creation. An unpleasant experience can dishearten even the most resilient investors, making it crucial to tread with caution if you are new to the stock market or not an expert," he added.

Last month, Sebi chairperson Madhabi Puri Buch stated that she was 'confused and surprised' at investor interest in Futures and Options (F&O) despite 90 per cent of individuals losing money in the segment.

She pointed to a recent research by the capital markets regulator which pointed out that only 11 per cent of the 45.24 lakh individual traders in the F&O segment made profit.

As per the research, there was an exponential increase in the F&O segment participation during the pandemic, with the total number of unique individual traders increasing by over 500 per cent from the 7.1 lakh in FY19.