The day F&O trading shattered a family I know

Yesterday was one of the hardest days I can remember.

A close friend called, his voice shaking. He had just found out that his wife had been secretly trading in Futures and Options (F&O) for months. She had pledged ₹25 lakh worth of family gold without telling anyone.

And now, almost all of it was gone, close to ₹20 lakh lost in a series of leveraged bets that spiraled out of control.

The money was one thing. What shook me was the silence.

No one in the family had a clue until it was too late. I could hear the disbelief in his voice, the way he kept repeating, “I never thought this could happen to us.”

That is the thing about F&O trading. You never think it will be you… until it does.

And this is not an isolated tragedy.

The numbers are chilling. SEBI’s latest study shows that over 93% of retail traders in the F&O segment lose money, together losing ₹75,000 crore in just one year. Over the last three years, retail losses in F&O have crossed ₹1.8 lakh crore.

Let that sink in. 9 out of 10 people lose, yet the trades keep flowing.

I knew this data. I had read the reports. But this was the first time I saw a family I know shatter under the weight of such a massive loss.

And that is why I am writing this. To make people understand why this F&O game is just madness, and why a retail investor can never or almost never make money in it on a consistent basis.

Why F&O Lures People In And Why It Almost Always Ends Badly

F&O trading looks deceptively simple from the outside.

You see people post screenshots on social media with ₹50,000 made in a single day, ₹2 lakh profit from one option trade and it sparks something inside you.

You start thinking, “If they can do it, why not me?” That is exactly how it starts.

The lure is powerful because it feeds on two very human emotions: greed and fear of missing out.

The idea that you can make a huge amount with a small capital, in days or even hours, is intoxicating. And in F&O, this is technically possible because of leverage with the ability to control large positions with a fraction of the money.

The problem? That leverage works both ways. A small move against you can wipe out your entire capital. Or worse, leave you in debt.

SEBI has been sounding the alarm for years, but the reality is harsh with over 93% of retail F&O traders lost money in FY25. That is not a typo. Nine out of ten.

The losses were not small either.

In one year alone, retail traders collectively lost ₹75,000 crore. Over the last three years, the total loss has crossed ₹1.8 lakh crore. And this is not because these traders were all “bad” at it. It is because the game is structurally stacked against them.

Here is why:

F&O is not investing, it is speculation. These instruments were originally designed for hedging risk, not chasing quick profits. In the hands of retail traders who lack deep market experience, they turn into high-speed bets with extremely low probability of sustained success.
The competition is not fair. When you trade F&O, you are not trading against a random crowd. You are trading against professional institutions, proprietary trading desks, and algorithmic systems that operate 24/7 with vast data, instant execution, and years of tested strategies. SEBI’s own research shows that while individuals lose, these institutions are the ones making money — and most of their profits come from algorithmic trades.
Costs bleed you dry. Even if you manage a few winning trades, brokerage fees, exchange charges, and taxes pile up. Over three years, retail F&O traders paid ₹50,000 crore just in transaction costs. That means before you even start, you are at a disadvantage as the house always takes its cut.
Volatility is your worst enemy. F&O prices swing wildly because they are leveraged bets on underlying stocks or indices. One bad day, one unexpected announcement, or one market gap can destroy weeks or months of gains.
Addictive behaviour keeps people trapped. SEBI found that over 75% of loss-making traders kept trading for years without stopping. They keep hoping to win back what they lost, doubling down until the hole is too deep to climb out.

This is why it is nearly impossible for a retail investor to make money in F&O on a consistent basis. You might get lucky once or twice. You might even have a good month. But over time, the math catches up. The costs, the volatility, the competition and they grind you down until the outcome is almost inevitable.

And the scariest part? Most don’t know this. People still jump in. Because the dream of fast money is louder than the reality of slow loss.

Who to Blame?

There is no single villain here, but there are clear forces feeding this fire.

Some influencers have turned trading into content. They post screenshots of massive intraday profits, pose next to luxury cars, and claim they “made it” through F&O.

What they rarely show is the months of losses, the sleepless nights, or the capital wiped out. The problem is, these curated wins create the illusion that anyone can do it and do it fast.

Then there are trading apps that have made placing complex F&O trades as easy as ordering food online.

Some even push “quick scalping” notifications or highlight the most traded options to lure people into acting immediately. They wrap the most dangerous segment of the market in bright, friendly interfaces, making it feel harmless when it is anything but.

And of course, there is Instagram Reels and Twitter (X) snaps, the endless stream of 15-second dopamine hits showing someone turning ₹5,000 into ₹50,000. You watch enough of those and it plants the idea that you are missing out if you are not trading. It is part entertainment, part bait.

Put all of this together and you have a perfect storm: a market segment already tilted against the small trader, dressed up and sold as a quick path to freedom. The reality is that most people are walking straight into a machine built to take their money.

This is why action matters.

SEBI has already made brokers show warnings that “9 out of 10 traders lose money in F&O,” but clearly that is not enough. We need tougher rules on how F&O is promoted online, stricter checks on influencers making financial claims, and limits on how aggressively trading apps push risky products.

Because right now, the system rewards getting more people to play a game where the house almost always wins and ordinary families are paying the price.

Please Stay Away From Futures and Options Trading

When I think back to my friend’s voice, I still remember the mix of shock, anger, and helplessness. Twenty lakh gone. Gold pledged. Trust broken. And all for a market segment where the odds were never in their favour.

It is easy to believe you will be the exception, that you will outsmart the market, the professionals, and the algorithms. But SEBI’s own data says otherwise.

F&O trading is not a harmless hobby. It is not an easy way to create extra income.

For most retail investors, it is a market segment that transfers their money elsewhere (essentially, F&O is a zero-sum game). The small premium bets through options, the frequent trade prompts, and the profit screenshots shown online are designed to pull you in, not to protect you.

Author Note

Note: This article relies on data from fund reports, index history, and public disclosures. We have used our own assumptions for analysis and illustrations.

The purpose of this article is to share insights, data points, and thought-provoking perspectives on investing. It is not investment advice. If you wish to act on any investment idea, you are strongly advised to consult a qualified advisor. This article is strictly for educational purposes. The views expressed are personal and do not reflect those of my current or past employers.

Parth Parikh has over a decade of experience in finance and research. He currently heads growth and content strategy at Finsire, where he works on investor education initiatives and products like Loan Against Mutual Funds (LAMF) and financial data solutions for banks and fintechs.