The SEBI is cracking down most of the FnO or Futures and Options because a lot of retail investors were losing money on it. To save the retailers SEBI is trying to limit the activities on the FnO. The question is why retail investors are actually going for FnO, this is because they are mostly trying to get the money faster.
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The problem with retail investor is that they don't have the capital to earn big and that's why whatever capital they have they try to take more risk to earn more money. For example if someone has 100K even if they take less risk, 10% will fetch them 10k whereas people who have just 10K wanted to have 100% return to make 10K to 20K. And that's actually the problem. When you are going for higher return, the risk increases. The risk can be something like you will lose all your money.
People who have high networth, they usually hedge their portfolio that means whatever happens to the market their money will be more or less remains the same. And that's why they use the FnO I.e. for hedging. But people have started using it wrongly, they are trying to leverage the volatility in the FnO and trying to earn big. And it is becoming a risky affair.
For me I am very scared for investing in FnO and along with trading. Though I take small trades once in a whole but I am not very good at it. And that's why I develop medium risk, medium return strategy like ETF ki dukan, Paison Ka Ped, Mutual Fund Investement. And that is giving me somewhat good returns which is good for me. And similarly I will continue to fund some of the strategy which can be beneficial and will start those startegy to see if it is according to my risk appetite.
