I am seeing more and more posts about people who have lost big on Futures and Options and that's why the data saying that 95% lose money in FnO is not actually wrong. First of all, I am not against FnO, I am against people who jumps on FnO without any plan or study. In simple terms Futures and Options which allow traders to speculate the price of the asset without actually owning it.
PC: Pixabay.com
Now the problem is there is big player in the game and they can change the price of any asset. So if you are a small player then the big player who have bug money can actually crush you and that's one of the reason of losing money. Next is that this is speculation and you might not know the exact price of the asset. I feel only those people should do options selling who have the asset and they want to mitigate the risk of volatility.
If you don't have the asset and just do options trading then it is nothing short of gambling. And that's why people lose money because we all know gambling means losing money most of the time. I have not done the Options trading but will do in the future. For example, I am buying the NiftyBees ETF. And when I have 1 lot of NiftyBees which is around 8 lakhs then I can sell the Options.
Now if the price increases, I will be benefitted but if the prices goes down, then also I will be benefitted because I have used the Options trading for hedging my Niftybees. And that's actually the best use case of doing the Options. So this is the route I will take whenever I have the asset of one lot. Until then I will not even think about the Futures and Options.
If you are seeing a huge money people are making profit from Futures and Options then, it might be because they are lucky one or two times or they have edited the profit.
