Options trading looks exciting. With a small amount, you seem to control a large position. This is the world of F&O — futures and options — and of calls and puts. But before you try it, you must know one number. In its study for 2024-25, SEBI found that more than 91% of individual F&O traders lost money. Together they lost about ₹1.05 lakh crore in a single year — 41% more than the year before. This article explains the basics in simple words, and why that warning matters. It is for learning only.
Shares vs F&O: the key difference
When you buy a share, you own a piece of a company. You can hold it for years. There is no time limit. F&O is different. It is a short-term contract that expires on a fixed date. If your view does not come true before then, the contract can become worthless.
What a call and a put are
- A call is a bet that a price will go up.
- A put is a bet that a price will go down.
You pay a small fee (called a premium) to place the bet. If the price moves your way by enough, the bet can pay off. If it does not move, or moves the wrong way, you can lose the whole fee. Many options end worthless, which is why the fee is so often lost.
Why it looks cheaper than it is
Options feel cheap because the fee is small compared to the position you control. This is leverage. Leverage cuts both ways. It can grow a small gain fast — and wipe out your money just as fast. The small cost hides the real risk.
Why so many lose
- Time is against you. Every day that passes, an option usually loses a little value, even if the price does not move.
- Costs add up. Frequent F&O trades stack up brokerage, STT and other charges that quietly eat your money.
- Speed and emotion. Fast price moves push people into panic decisions.
These are not rare problems. They are why SEBI's data shows most people lose, year after year.
A calmer path
There is nothing wrong with wanting your money to grow. But for most people, patient investing in shares beats fast trading in options. A rule-based, diversified approach — like our Model Portfolio — aims to grow steadily and avoid big losses, instead of chasing quick wins. If you are tempted by fast trading, first read intraday trading vs positional investing and swing trading and chart patterns.
Calls and puts are not magic. They are short-term, high-risk bets where the odds — as SEBI's own numbers show — are stacked against the individual trader. Know that before you risk a single rupee.
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