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SEBI lens on retail participation in the F&O segment

May 19, 2022

SEBI lens on retail participation in the F&O segment
Worried over the rising retail participation in the Futures and Options (F&O) segment, the Securities and Exchange Board of India has undertaken a study to gauge the extent of retail presence in this section. The result of the review could lead to the regulatory invention if required.

“The findings of the study will be revealed soon. SEBI is worried about the dangers related to the F&O section and the rising number of retail investors coming into this segment,” said a source near the turn of events. “Based on the findings of the study, the market regulator will think about taking suitable measures.”

The F&O segment is riskier than investing in stocks. Typically, high net worth people, traders, and speculators participate in the segment.

But the rising overall retail interest in the value markets has the controller stressed as F&O exchanges put uninformed investors at a more prominent monetary gamble other than making the market theoretical. Prospects are subordinate agreements that require the purchasing/offering gatherings to execute security at a foreordained future cost and date.

As per market-watchers, the new increased volatility is drawing in investors needing to exploit the sharp swings in the bourses. But, large swings in the wrong direction quickly erode capital, especially for inexperienced investors.

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