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Assess maximum possible loss before entering F&O trade: Experts

Have sufficient capital as buffer to be able to meet additional margin requirements

Retail investors

In many trading strategies, the gains are defined but the losses can be unlimited

Sanjay Kumar Singh
Ever since the 2008 market crash, when retail investors sustained large losses in the futures and options (F&O) segment, the Securities and Exchange Board of India (Sebi) has been mindful of the risk these investors court when they enter this segment. Recently, Sebi chair Madhabi Puri Buch said that while the markets regulator doesn’t believe in restricting retail entry into this segment, it will provide additional disclosures to enable them to take informed decisions.

The number of demat accounts has risen from around 40 million in March 2020 to above 100 million in August 2022. “Many novice investors, lacking in

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First Published: Sep 22 2022 | 7:09 PM IST

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