Sebi Chairman Urges Retail Investors too Shun Speculativeโ Derivatives Trading
Mumbai, October 6, 2025 โค- Retail investors should avoid speculative trading in derivatives due to the inherent risks, Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey cautioned on Monday. Speaking at the World Investor Week โ2025 event organized by the National Stock โExchange (NSE), Pandey underscored โฃthat Sebi studies consistently demonstrate losses for retail investors engaging in derivatives trading, often stemming โfrom a lack of understanding of the โคassociated risks.
“Individuals should examine โwhether they seek toโฃ build long-term wealth or want to engage in speculative, โขshort-term โขtradingโฆDerivatives are meant for hedging and risk management, not โคfor speedy gains,” Pandey stated. He advised retail investors to carefully โassess their risk capacity, thoroughly learn how derivatives โคcontracts function, and refrain โfrom speculative trades.
The warning comes as participation in the Indian securities market expands. Sebi data reveals a significant increase in unique investorsโฃ to 13.4 crore. A recent Sebi-commissioned survey indicates that 63% of Indian households (21.3 crore households) are aware of at least one securities market product, though actual โparticipation remains at 9.5% (3.2 crore households).
Though,Pandey highlighted a critical knowledge gap,noting that only โฃ36% of investors โpossess high or moderate knowledge of the โขsecurities market,leaving them vulnerable to risks and potential fraud. He emphasizedโ that while โคSebi provides tools for investorโ protection,”the โขultimate shield for investors is toโ be smart through responsible investing,” relying on credible sources and dismissing unsolicited offers on social media.
Sebi has been actively workingโฃ toโ combat misleading content online, having removed over 1 lakh unlawful items from platforms like Google and Meta in the last 18 months.