“Sebi studies have consistently shown that retail investors trading in derivatives end up facing losses, often because they do not fully understand the risk in these products,” Sebi chairman Tuhin Kanta Pandey said at the World Investor Week 2025 event organised by NSE.
“Individuals should examine whether they seek to build long-term wealth or want to engage in speculative, short-term trading…Derivatives are meant for hedging and risk management, not for quick gains. Retail investors should therefore assess their risk capacity, learn how these contracts work, and avoid speculative trades,” he added.
Increased access, simplified on-boarding, and wider awareness has led to the number of unique investors in the securities market ecosystem increasing to 13.4 crore, Sebi data shows.
A recent survey commissioned by Sebi reveals that 63% of Indian households (21.3 crore households) are aware of at least one securities market product. However, the actual participation stands at 9.5% of households (3.2 crore households).
The Sebi chief highlighted that only 36% of investors possess high or moderate knowledge of the securities market. This knowledge gap is a vulnerability that exposes investors to risks and makes them susceptible to fraud, he said.Pandey said that while Sebi can provide the tools, the ultimate shield for investors is to be smart through responsible investing.“A smart investor relies on credible, verified sources, and ignores unsolicited offers on social media,” he said.
In the last 18 months, over 1 lakh unlawful contents have been removed from various social media platforms after Sebi raised concerns about misleading content with companies like Google and Meta.
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