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Attention Investor

Precautions to be taken by clients while trading in derivatives/options and avoid practices such as:

Sharing of trading credentials : login id & passwords including OTP’s.

Trading in leveraged products like options without proper understanding, could lead to losses

Writing/ selling options or trading in option strategies based on tips, without basic knowledge & understanding of the product and its risks.

Trading in “Options” based on recommendations from unauthorised / unregistered investment advisors and influencers.

Dealing in unsolicited tips through Whatsapp, Telegram, YouTube, Facebook, SMS, calls, etc.

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RISK DISCLOSURES ON DERIVATIVES


* 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
* On an average, loss makers registered net trading loss close to ₹ 50,000.
* Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
* Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

Source: 1. SEBI study dated January 25, 2023 on “Analysis of Profit and Loss of Individual Traders dealing in equity Futures and Options (F&O) Segment”, wherein Aggregate Level findings are based on annual Profit/Loss incurred by individual traders in equity F&O during FY 2021-22.

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