How many investors make money in Future and Options trading?

Happy Republic Day!

Like an annual ritual, I have been writing one article every year asking my friends and readers to stay away from Future & Options (F&O) trading. The reason for this caution is simple. Of the 100-plus IT Returns (of serious F&O traders) filed by us, only three are making money. When most of them lose their hard-earned money, well-informed investors should stay away.

Yesterday (25th Jan 2023), the market regulator SEBI released a 33 pages document analysing the Profit or loss of Individual traders dealing in the Equity F&O segment. I just finished reading the entire document and am writing this short note.

My first impression. SEBI research is generous when it said 9 out of 10 individuals have incurred losses, with an average loss of Rs.1,25,000 during FY22. The minority, of 10%, made an average profit of Rs.1,90,000.

One thing is common with our experience dealing with F&O traders and SEBI report. More than 80% of them are MALES. This shows that women are either wiser and/ or more risk-averse than men. I can add one more point and bet on it: most of the males would have hidden the information from their wives or are unmarried!

F&O is similar to the lottery business or a game show in an exhibition. Initially, when you start, you will start seeing profits. You invest Rs.10,000 and make 2,000 profit in 3 days. Thrilling! You get into mental maths. Instead of 10,000, had I invested Rs.1,00,000 or Rs.10,00,000….. This is how you get hooked onto this game of F&O. 90% of them are the descendants of Abhimanyu; they know to enter the Chakrayuha only (Stock Market) and fail to find a way out. They will succumb to injuries (financial), and most of them burn to ashes (lose their entire capital)

What is more disturbing is that the study says people in the age bracket of 30 and 40 constitute 40% of the traders. In absolute terms, 18 Lakh people out of 45 Lakh traders are from this age group. Is this not the age group that is in the prime of their career? Shouldn’t they spend their quality time on productive work and enrich their knowledge? Maybe they are ‘working’ on paper and in the payroll of large companies and are also daylighting in Stock Market !!! Hello Folks, chodo yaar, get out of this F&O; it’s not your cup of tea.

Another revelation is the growth in the traders’ segment. What was 7 Lakh in 2019 has grown to an astonishing 45 Lakhs traders in 2022! I remember Blue light Fly Insect trapper installed in restaurants! Flies see the light and get trapped. Please decide whether you want to be a fly or fly high in your career.

I am sure of getting a few responses or comments from my friends stating that if one does F&O as a full-time activity and with 100% focus, using algorithms, one can make money. I appreciate their thoughts and wish them good luck. I must also admit to the fact that many such good wishes didn’t work in the past!!!

I met a senior trader a few days back. (when I say senior, he has decades of experience losing money) and he was told if one does Options trading, the chance of making money is very high. SEBI report has sliced his views. It said 98% traded in Options and only 11% traded in futures (which means 9% of those who did futures also traded in options). So, friends, Options is also not an option to try!!!

To summarise, I have a one-line suggestion.

Do something worthwhile.

Have a good day.

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About B E Kumar Prasad

B E Kumar Prasad
He is a Practicing Chartered Accountant in Bengaluru, India. He has 28+ years of experience in income tax, business setup, and NRI matters. He is also an Insolvency Professional, Registered Valuer (F&SA) and Social Auditor.Prasad welcomes your comments and questions. Please email him at

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1 year ago

Very sensible comment Mr. Prasad. I totally agree with your point of view.
This topic deserves a multifaceted assessment: quantum, neurological, physiological, epigenetic, etc. It may create a long discussion but allow me to make basic assertion on the topic.

This is how the wiki describes the process of games (stock, financial games are no exception) :
Proverb the house always wins

  1. In a casino, all gambling is designed so that the house (i.e. the casino owners) will always net a profit, regardless of the successes of the patrons

This principle applies to all financial games. If you are not the creator of this particular system and do not play by your own rules, then your chances of making money on the system tend to zero. This is not an economic statement, but a quantum physical one. To capitalize on the system or beat it, you need to operate from a higher level of energy (Einstein).

There is a physiological explanation for why not to play financial… If a person has fixed his attention on the outside world (as we all do), then he becomes dependent on his own stress hormones, as a result of a reaction to an external situation. The cells of the body in each stressful situation demand even more hormones to respond than in the previous stressful situation. Thus, a Pandora’s box opens for total dependence on the process of losses… People lose the ability to rationally evaluate and continue to lose, finding new justifications for these losses…

There is one more reason not to get involved… A friend of mine said: “Yura, I’m quite a successful financial speculator. But look at my hair. Every gray hair is a fall in my shares. I don’t know how much I will spend on medicine at the end…” 🙂

Yes, it’s better to direct our assets to something creative and useful…

1 year ago

Sir, this short note ? is helpful to our whatsApp group only. This should be published in leading English Daily News paper. Then only major investors will be benefited. Sivalingam accountant

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