look news india
At a time when participation of retail investors in this segment is increasing, the Securities and Exchange Board of India's (SEBI) proposal to review the eligibility criteria for trading in shares in futures and options (F&O) will reduce the risk for them.
This proposal of improved liquidity and stability to curb the risk of market manipulation, if implemented, will ensure that some investors will be unable to manipulate the price of stocks. As a result, there has also been significant churning in the derivatives segment. Out of which 25 stocks are likely to be reduced and about 78 stocks are likely to be added, it has been revealed based on the research report.
Retail investors are showing more interest in the derivatives segment than the cash market. Due to which the F&O market has seen a boom in the last few years. Despite the warning of the SEBI chief, retail investors' attraction towards F&O remains intact. A study by SEBI has revealed the reality that most individual investors are losing their money.
Of course, market experts believe that while the market regulator is moving in the right direction, it is important to immediately ensure that guidelines regarding retail investor participation in the F&O segment are also revised. While the last three to four years have seen a worrying pace in retail investor participation in the sector, experts say there is a need to rein in enthusiasm. Net turnover of retail investors in the cash market fell by four per cent year-on-year to Rs 47,180 crore in FY 2023-24. On the other hand, the derivatives market grew by nearly 55 per cent to Rs 92,905 crore in FY 2022-23. According to experts, institutional investors are better placed in the derivatives market due to the availability of better tools and software.
