The road to easy money is paved with high monetary risks, say city youngsters who have lost sizeable sums of their hard-earned savings after blindly following financial influencers online.
They say they incurred the losses after making speculative investments in Futures and Options (F&O), which allow people to forecast stock or index values.
They admit that the lure of high leverage—borrowings to invest in more stocks than they could afford—added to the attraction of big bucks, while drawing them into the F&O market without adequate research or even an understanding of financial risks.
Experts describe F&O as a high-stakes trading bet, where each opportunity for generating quick gains is accompanied by equally high, if not higher, risks.
Regardless of the warning, scores of young working-class individuals in the city are indulging in these high-risk trades as they desperately seek a way out of their current financial situation.
A Securities and Exchange Board of India (SEBI) report says that nine out of every ten individual F&O traders suffered losses between 2022 and 2024. The market regulator pegs the cumulative losses at over Rs 1.81 lakh crore.
Worst-hit by these losses were young individuals, who often went to the extent of mortgaging assets for fear of missing out on the big-ticket opportunity.
Youngsters say they were drawn to the space by social media influencers who make F&O trading sound easy and profitable, without once focusing on the losses that could destroy their financial future within the span of a few hours.
Beginner's luck also plays a part, as most people experiencing early gains become addicted and continue to throw good money after bad in the vain hope of recouping their losses.
Experts say the lack of financial knowledge is at the heart of the problem, as it results in emotional and purely speculative trading decisions.
Akash, a print technician in the city, says he lost all his savings. He has now enrolled in a course to learn the intricacies of the stock market.
He says he continued to be drawn into making fresh investments as he attempted to recover from the losses that resulted in a wipeout of his savings.
In his late twenties, Santosh Yadav started investing in F&O after dabbling in stocks for a couple of years. He says that his initial success led him to squander away his gains.
Yadav says that financial influencers tell gullible youngsters how F&O trades can help multiply their investments in a short time, but never warn them of the risks.
"Today, I have stopped investing in the stock market completely. Now, I only focus on my job and improving my skills," he adds.
City-based Chartered Accountant Deepshikha Gupta says, "I stress the importance of understanding one's risk appetite by evaluating financial goals and risk tolerance."
She says that she regularly advises clients to keep their investments diversified to reduce risk by spreading investments across sectors and asset classes.
Warning against the get-rich-quick route, Gupta says, "It’s important to invest in areas one understands, as informed decisions help manage risks effectively. Focus on long-term goals for gradual wealth creation and avoid speculative trading for more stable returns."
Conservative stock market watcher Badshah Khan says, "Though perfectly legitimate, F&O trading calls for a deep understanding of market trends and risk management. Unfortunately, most people treat it as a form of gambling, which results in losses."
Khan's observation is echoed by stock market experts, who say that youngsters must focus on the fine print first and resist the temptation of going all in, as only disciplined traders survive the long haul.