Broking firms Groww and Samco Securities have introduced multiple innovative features designed to promote responsible trading practices for retail investors engaged in derivative trading.
Alongside these efforts, both firms as well as Axis Securities are spearheading educational initiatives to raise awareness and enhance financial literacy among investors.
Apart from brokers, markets regulator Sebi has tightened the norms for equity derivatives trading, lowering the number of weekly options contracts available to trade for investors to one per exchange and raising the minimum trading amount nearly three times to Rs 15-20 lakh, from Rs 5-10 lakh.
Other measures announced by Sebi included intra-day monitoring of position limits, mandating upfront collection of option premiums, removal of calendar spread benefit on expiry day, and increased tail risk coverage.
The changes follow a Sebi study published in September, revealing that 93 per cent of individual traders incurred losses in equity Futures & Options (F&O) between FY22 and FY24 with aggregate losses exceeding Rs 1.8 lakh crore over three years.
A previous Sebi report from January 2023 showed that 89 per cent of such traders faced losses in FY22 alone.
Groww introduced F&O Safeguard –a risk management feature designed to act as a deterrent for F&O traders experiencing losses consistently. If a trader repeatedly incurs losses, they are prompted to reassess their trading approach, with the potential for their F&O trading activity to be paused unless they provide additional suitability information, its spokesperson said.
The platform also offers the F&O Pause feature to help users maintain discipline by halting trading during volatile periods or after significant losses, and Safe Exit, which automatically closes positions once a pre-set loss limit is reached, he added.
These tools empower traders to exercise greater control, whether by pausing during volatile periods, reassessing their trading approach after consistent losses, or limiting potential downside through automated safeguards.
On the educational front, Groww, which engages 12.5 million active investors, also promotes financial literacy through its widely-read Groww Digest, reaching 1.5 crore unique monthly readers.
The digest provides insights into market trends, investment strategies, and financial literacy tips, alongside multi-language content in eight languages, including Hindi, Tamil, and Bengali.
Samco Securities has introduced the feature "Options B.R.O." (Build, Research and Optimize) that helps traders transition from speculative trading to a more strategic and responsible approach, minimizing risks and maximizing potential returns, Nilesh Sharma, Executive Director and President, SAMCO Securities, told PTI.
The BRO framework empowers traders to build customized option strategies based on their market outlook (bullish, bearish, or neutral), ensuring alignment with their investment goals.
It offers comprehensive research on over 1,000 strategies, including detailed analysis of profit and loss, option Greeks, and key metrics to help traders understand risks and rewards.
Additionally, traders can optimize strategies using advanced filters like risk type, probability of profit, and maximum loss, ensuring decisions align with their risk appetite and objectives for more responsible trading.
Samco also offers a robust library of educational content across platforms like YouTube, catering to investors at all levels, from beginners to experienced traders.
Additionally, its research-backed recommendations include both entry and exit calls, supporting informed decision-making. On educational initiatives, Axis Securities focuses on empowering investors through informed decision-making rather than offering direct stock recommendations. It provides comprehensive reports detailing the reasoning behind each investment idea.
Samir Shah, Head of Online Business at Axis Securities, said. "For first-time investors, we simplify the complexities of the stock market by covering topics such as how the market operates, how to select your first stocks, and the dos and don'ts of investing. Additionally, we provide in-depth resources on advanced charting tools and trading strategies for more experienced investors." Futures contracts obligate the buyer and seller to transact at a predetermined future date and price, while options give the holder the right, but not the obligation, to buy or sell the asset at a set price within a specific period.
These financial instruments are used for hedging risks, speculating on price movements, and arbitraging price differences. However, they come with significant risks, including leverage risk and market volatility, which can lead to substantial losses.
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