F&O Risks Every Investor Should Read

Equity futures and options use leverage. That can enlarge outcomes in either direction. Before you request F&O activation, read the Risk Disclosure Document and understand margins, expiry, and settlement. Lotusdew Securities provides F&O broking to eligible clients through Airalgo — details on Futures & options broking.

SEBI risk disclosure for equity F&O

For investor awareness, SEBI’s study dated January 25, 2023 (aggregate findings for individual traders in equity F&O during FY 2021–22) reported that:

• 9 out of 10 individual traders in equity F&O incurred net losses.
• On average, loss makers registered net trading loss close to ₹50,000.
• Loss makers also spent about 28% of those net losses again as transaction costs.
• Traders with net profits spent between 15% and 50% of those profits as transaction costs.

Those figures describe a study population. They are not a forecast of your personal result — and they are not a reason to ignore the Risk Disclosure Document.

Before you switch the segment on

• Nobody — broker, authorised person, or associate — may sell you fixed or guaranteed returns.
• Ignore unverified social-media “strategies” that skip risk.
• Know margin calls and what expiry / assignment can do to a position.
• Fund only designated broker bank accounts.
• Match every active day against contract notes and Exchange alerts.

If you need to escalate

Use contacts on Regulatory Disclosure, then SEBI SCORES and SEBI’s published online dispute resolution routes when required.

Derivatives can involve a high risk of loss and may not suit every investor. This article does not solicit F&O trading or promise profits. Investments in securities market are subject to market risks; read all the related documents carefully before investing.