Social media, YouTube videos rule decision making in F&O trades: Sharekhan

Assumption of nearly 40% people getting good returns against the reality of 90 per cent making losses

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Nearly 53 per cent of traders in the Futures and Options (F&O) segment of the stock market make decisions based on the mentions on social media and YouTube videos, and the advice of family and friends, according to a pan-India survey by Sharekhan with Kantar.

The report titled ‘Serious about the markets’ found that only 10 per cent of the traders did their analysis.

Over 40 per cent of the newbie traders claimed they entered the F&O segment for making quick and easy money, while 48 per cent believed 30-40 per cent of the people make consistent ‘good returns’.

The assumption of 30 per cent to 40 per cent of respondents making good returns is in sharp contrast to the findings by the market regulator, which states that 9 out of 10 investors lose their money in the derivatives or the F&O segment.

Following the findings of the study conducted by the Securities and Exchange Board of India, stockbrokers were mandated to show risk-related disclosures to investors and traders.

Additionally, 55 per cent of the respondents surveyed said they buy more to average out their losses in F&O trades.