Seasoned market investors enjoy market volatility while some young retail entrants exit: ANMI President Kamlesh Shroff

As Dalal Street sees strong upswings and downswings following March’s sharp selloff, ANMI's new National President Kamlesh Shroff said that the sharp market volatility mostly affects investors who have newly entered the markets, while the seasoned investors instead enjoy it.

Speaking during an interview with ET Now, the newly-elected President of the Association of Stock Brokers, said that the market volatility may disturb the younger investors who have come to the markets in the last run and are seeing such sharp turns for the first time. This may lead to some retail investors exiting the markets, he predicted.

On being asked about SEBI’s crackdown on derivatives trading, Shroff highlighted that at least 50% of investors lose money in F&O trading. He said the market regulator has done a great job keeping retail investors away from the segment. Although SEBI’s data says 90% traders are losing money in F&O, Shroff believes at least 50% is indeed incurring losses in the segment.

Shroff suggested that markets could also focus on the product suitability - new products for novice investors, unlike the typical contracts that are better suited for more seasoned traders. He highlighted that the F&O segment needs such products that look into net worth to ensure participation. “Second is NISM exams, which are there for every dealer module. So, some kind of a small tweak in terms of having these exams for someone who wants to participate in the futures and options segment. So, from that perspective, they should actually have a module for the same,” he added.

According to a regulatory study released in July last year, at an aggregate level, nearly 91% of individual traders incurred net loss in the equity derivatives segment in FY25 and a similar trend was observed in FY24 as well. SEBI has also pointed out that retail activity is heavily concentrated in weekly index options, raising concerns about systemic risk. Futures and options are derivatives that let traders bet on or hedge against moves in an index or stock.

After the Union Budget 2026-2027 sharply increased the securities transaction tax on futures and options, Finance Minister Nirmala Sitharaman defended the move, arguing that the government could not remain silent as speculative ‘satta’ in derivatives inflicts heavy losses on small retail investors.

“We are touching only the futures and options segment. No one has increased transaction costs elsewhere. Speculation, what we call ‘satta’ in Hindi, is highly risky, and many people with limited funds face heavy losses. The nominal increase in STT is aimed purely at deterring excessive speculation. We respect market activity, but the government cannot ignore the losses faced by small investors. This tax is only one element to support that policy. How the rest of the market is regulated is up to the market regulator,” Sitharaman said in a statement to the press after her Budget speech.

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