Groww Launches Tool To Curb Excessive Speculation In Derivatives Trading

Amid widespread concerns over investors facing losses on derivative bets, a domestic brokerage on Tuesday launched a tool to promote "disciplined trading" to curb "excessive speculation".

The features introduced include a "safeguard" tool wherein a futures and options account will get stopped for 30 days if an investor is not able to provide additional information to prove suitability, the platform Groww said.

It can be noted that according to data collated by markets regulator SEBI, nine out of ten F&O bets result in losses for investors, and concerns are being raised over household savings ending up for speculative purposes.

"With India's F&O market experiencing significant growth in recent years, the need for robust risk management tools has become increasingly apparent," Groww said.

The safeguard feature is aimed at risk management by deterring traders from experiencing losses consistently, while the pause feature allows traders to temporarily pause their F&O account during periods of market volatility or when they need to take a break from trading.

Apart from these, there is also the "safe exit" option, wherein a safety net is provided to limit losses on F&O positions, it said.

As per RBI's financial stability report, the equity derivatives segment witnessed a 42.8% jump in volume terms to touch 95.7 lakh in fiscal 2024 from 65 lakh in fiscal 2023.