“The Asian crisis of 1997-1998 is a very important example,” he said.
“When we take pride in the fact that we have the world’s largest futures and options (F&O) trading volume, we need to ask ourselves whether this is a sign of progress or a sign of concern,” the CEA said.
He said the financial sector has a responsibility to ensure capital market growth in areas where India’s household savings can actually be put to productive use.
“Many people currently involved in the market do not understand them…The financial literacy required for stock trading is very different for futures trading and options trading, so reconsider the baggage of futures trading and options trading. ” said Nageswaran. He said. Pouching refers to the process of making financial products and services available in smaller, more manageable packets. According to government data, household net savings plunged by Rs 900,000 crore over three years to Rs 14.16 billion at the end of the 2022-23 financial year. According to the data, investments in mutual funds almost tripled in three years from Rs 64,084 crore in 2020-21 to Rs 1,790 crore in 2022-23. Household investment in stocks and corporate bonds nearly doubled from Rs 1.07 billion in 2020-21 to Rs 2.06 billion in 2022-23.
Finance Minister Nirmala Sitharaman had warned earlier this week that an “unchecked explosion” in retail food and commodity trade could cause problems for household finances.
“Household finances are undergoing a generational change. We want to protect household finances,” he said, adding that exchanges NSE, BSE, and market regulator Securities and Exchange Board of India (Sebi) will work together to protect them. urged the development of strong compliance and regulatory standards. It is in the interest of investors,” Sitharaman said.
In November last year, Sebi Chairman Madhavi Puri Buch said he was “perplexed and surprised” by investors’ interest in F&O trading even though 90% of individuals incur losses in this sector. Stated.
Buch said investors need to take a long-term view, adding that the chances of achieving above-inflation returns through this strategy are much brighter.
A study by capital markets regulator Sebi last year found that of the 45.24 million retail traders in the F&O sector, only 11% made a profit.
Participation in the F&O segment has increased sharply during the pandemic, with the total number of unique individual traders increasing by more than 500 percent from 710,000 in FY2019.
