A cautionary post on options trading by market commentator Nihal Gupta is gaining traction on X (formerly Twitter) after he shared what he described as the decade-long financial downfall of his “smartest cousin,” who allegedly fell into a Rs 70 lakh debt trap after getting involved in options trading.
In the thread, Gupta shared the story as a warning about how early success and confidence can become dangerous in high-risk derivatives trading. “My smartest cousin lost everything in options trading,” he mentioned, adding that it was an example of how “a genius fell into a Rs 70,00,000 debt trap.”
As per Gupta’s post, his cousin was once considered as the family’s “success kid”. He has strong academic credentials and a stable corporate job. He claimed the person had a “Tier-1 B.Tech, Tier -1 MBA,’ had landed a “12L job in 2013”. He also purchased a house and brought his parents to live with him, a milestone that made the family proud, he said.
How did the trading loss begin?
Gupta stated that his cousin’s downfall started after he found out about options trading. He described a pattern of early profits followed by escalating risk. “First few months: profits. Then: bigger trades. Then: Bigger losses. Then: ‘Just need to recover once,” the post stated. Gupta’s post suggested that the problem wasn’t a bad trade, but repeated loss-chasing.
What decisions made the situation worse?
A major turning point, as per the post, was when he decided to quit job to trade full-time. “It was all downfall from there,” Gupta said in his post. He further claimed the trader started borrowing to continue trading, started taking personal loans, and increased his home loan while waiting for a turnaround. Gupta described it as chasing a “comeback moment that never happened.”
Over 10 years, Gupta alleged, the losses climbed sharply. “Over 10 years, he lost Rs 1+crore in F&O-buying and selling,” he added.
What’s the takeaway?
In the post’s conclusion, Gupta claimed his cousin is now 35, working at a bank with a “Rs17L PA” salary, but is “buried under Rs70 lakh debt” and is worried about missing a single EMI.” He further added that the person “may even have to sell his house to survive.”
Gupta summarised his post with an alarming lesson for retail traders. “In markets, intelligence is not an edge. Discipline is.” He also stated that, “Overconfidence destroyed what talent built.”
Online reactions to the viral thread
The thread sparked mixed reactions, with some users focusing on how long the losses reportedly took to accumulate, and others pointing to risk management failures. One user commented, “It took 10 years to lose 1 cr? Pretty long time. People lost such amounts in commodities in a week.” Another one wrote, “The problem with FNO retailers is, they chase tops and bottoms and don’t execute their strategy (backtested one) with utmost discipline. Especially not booking profits and not taking taking stricter SLs (stop-loss)”.
A third reaction appealed for more preparation before entering markets, stating, “If people are forced to read ‘The Intelligent Investor’ once before coming to stock market, many such incidents could be avoided. But I am also a believer for free markets and incidents like these are a part of it.”