Ashishkumar Chauhan, MD and CEO of the National Stock Exchange (NSE), has made an important announcement.
He said that trading in the futures and options (F&O) segment will not remain open to everyone. The rules are being made stricter so that ordinary people do not lose their hard-earned money in speculation.
Under the new approach, a minimum eligibility requirement will be introduced for F&O trading. The main goal is to protect small investors from heavy losses.
90% of Small Investors Are Losing Money in F&O
A report by market regulator SEBI has surprised many people. According to the report, about 90% of individual investors trading in the F&O market are facing losses.
Many people invest their savings hoping to earn quick and large profits, but instead they end up losing money.
To reduce this growing speculative trading, stricter rules are now being prepared.
Why Government and SEBI Are Taking Strict Steps
The NSE CEO explained that as long as retail investors keep entering such risky trades, the government and SEBI will continue to tighten regulations.
Recently, the Securities Transaction Tax (STT) was increased in the budget to discourage short-term speculative trading.
With the upcoming rules, only investors who properly understand the risks of F&O trading will be allowed to participate.
Impact on the Stock Market
This announcement has created concern in the market. Shares of BSE fell by 3%, while shares of brokerage firm Angel One dropped by 4.5%. This suggests that the market expects trading volumes to decline after the new rules are implemented.
