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The article highlights a growing concern in India's financial markets, as Rahul Gandhi, the leader of the opposition, demands transparency from the Securities and Exchange Board of India (SEBI) regarding the beneficiaries of significant losses incurred by small investors in Futures and Options (F&O) trading. Gandhi's call for transparency stems from a study conducted by SEBI itself, revealing a stark reality – over 90% of individual traders experienced losses in the F&O segment during the three-year period from FY22 to FY24, with an aggregate loss exceeding Rs 1.8 lakh crore. This staggering figure raises questions about the fairness and transparency of the F&O market, leading Gandhi to demand the disclosure of the 'Big Players' profiting from these losses.
The article further details the findings of the SEBI study, demonstrating a stark disparity between the losses faced by the vast majority of individual traders and the gains made by a select few. While 93% of over 1 crore individual F&O traders incurred average losses of about Rs 2 lakh per trader, only 7.2% of individual traders managed to turn a profit over the three-year period. This disparity suggests a potential systemic issue within the F&O market, with a small group of individuals or entities seemingly profiting from the losses of countless others.
The article also points to a dramatic increase in F&O trading activity in recent years, with the number of retail traders doubling in just two years to about 96 lakh in FY24. Despite contributing a significant portion to market turnover, these individual traders remain a clear majority in number terms, with 99.8% of total traders in the equity F&O segment being individuals. The availability of sophisticated trading platforms and lower transaction costs have made it easier for retail investors to participate in F&O trading, but this increase in accessibility has also led to a greater vulnerability for many individual traders. The SEBI acknowledges the need for increased investor education and risk management practices in light of the growing number of retail traders experiencing losses.
Gandhi's call for transparency from SEBI concerning the identity of the 'Big Players' benefiting from these losses raises important questions about the ethical and regulatory framework surrounding the F&O market. While the article doesn't provide specific details about potential wrongdoing or manipulation, it highlights the need for thorough investigation and greater accountability within the financial system to protect the interests of small investors. The concerns raised by Gandhi and the data revealed by the SEBI study underscore the importance of safeguarding the integrity of the financial markets and ensuring that they are not rigged in favor of a select few at the expense of countless individuals.
Source: SEBI Must Reveal Big Players' Profiting From F&O Losses: Rahul