Confused & surprised at investor interest in F&Os, long-term view will deliver better results: SEBI Chief

SEBI chairperson Madhabi Puri Buch surprised by investor interest in F&O despite 90% losing money. Urges long-term investment for inflation-beating returns. SEBI research shows 11% of 45.24 lakh individual traders made profit. SMS link to download IRRA in case of broker outage, allowing traders to square-off open positions in under two hours.

SEBI chairperson Madhabi Puri Buch on Monday said she is "confused and surprised" at investor interest in Futures and Options (F&O) despite 90 per cent of individuals losing money in the segment.

Mr. Buch said there is a need for investors to look at the long term and added that chances of making inflation-beating returns are much brighter through this strategy.

Speaking during the launch of the Investor Risk Reduction Access (IRRA) platform at Asia's oldest stock bourse BSE here, Buch pointed to a recent research by the capital markets regulator which pointed out that only 11 per cent of the 45.24 lakh individual traders in the F&O segment made profit.

As per the research, there was an exponential increase in the F&O segment participation during the pandemic, with the total number of unique individual traders increasing by over 500 per cent from the 7.1 lakh in FY19.

"I must admit, I am always a little confused and surprised as to why people continue to do that (bet in F&O) knowing that the odds are not in their favour at all," Mr. Buch said.

"There is a 90 per cent chance that the investor will lose money in the F&O segment, but we also know, and the data shows us, that if you take a long-term view of the market, and if you invest with a long-term perspective, you will rarely go wrong," she added.

There is a "very good chance" that an investor will create wealth over a sustained period of time that will exceed the inflation rate in the economy, if the investment calls are for the long term, the SEBI chief said.