A Study on Causes of Indian Investor’s Losses in Options Trading
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A Study on Causes of Indian Investor’s Losses in Options Trading
Authors:
Mr. Shashank.D1, Mr. Praveen Joshi2
Student of Department of MBA1, Assistant Professor in Department of MBA2
Department of MBA 1&2, Parivarthana Business School, Mysore
Abstract: The current study was undertaken to analyze profit and loss patterns for individual traders in F&O during the three-year period from FY22 to FY24, and for all the categories of investors in equity and equity derivatives markets during the Single year FY24. The results showed that 93% of over 1 crore individual traders incurred average losses of around 2 lakh per trader (inclusive of transaction costs). Top 3.5% of loss-makers, approximately 4 lakh traders, faced an average loss of 28 lakh per person over the same period, including transaction costs. Most of the profits were generated by larger entities that used trading Algorithms, with 97% of FPI profits and 96% of proprietary trader profits coming from algorithmic trading. The main reason is an average retailer's doing options buying.
Keywords: Options Buying, Options Greeks, Hedging, Premium, Trading, F&O, algorithmic Trading,
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