Trading addiction: BTech student with no income loses Rs 46 lakh in F&O trading
The student, who has no source of income was reportedly borrowing money from friends, parents, bank & personal loan apps to satisfy his addiction
Future and Option (F&O) trading has attracted many investors with its alluring promise of quick profits. However, like any trading platform, it comes with a bag full of risks. A Chartered Accountant recently shared a story of a 3rd-year BTech student, highlighting the risks and potential for addiction associated with F&O trading. The student, who has no source of income, lost Rs 46 lakh in two years through trading.
CA Roshan Agarwal posted the whole story of the student whose Income Tax Return (ITR) he was filling, on the social media platform X, “Yesterday I filed one ITR of a 3rd year BTech student whose income is ZERO but loss from F&O is 26 lacs. Last year too he had around 20lacs F&O loss. Last year, I tried to convince him not to take shortcuts for quick income and leave F&O and he was convinced,” Agarwal wrote.
The student, who has no source of income was reportedly borrowing money from friends, parents, bank & personal loan apps to satisfy his addiction. Agarwal revealed that “He took money from his parents, took loans from banks and microfinance apps, borrowed from friends…I don’t know how he is managing right now.”
Agarwal further wrote, “Last year I tried to convince him not to take shortcuts for quick income and leave F&O and he was convinced. But this year he was back with bigger loss.”
The Reality of F&O Trading Success Rates
When asked why he continues to invest despite losses, the boy said he can’t help it; he is “addicted” and unable to quit.
The CA from Assam concluded his post by cautioning people not to get attracted to these alluring schemes of quick profit-making.
Citing the CA Hindustan Times reported, “On social media, you will only see profit. You will never see a trader talking about his losses. Young people get influenced by these social media creators. People sell courses on Telegram on F&O trading,” he said, asking inexperienced investors to steer clear of it.
The CA explained, “Trading in F&O without the expertise & practice needed is like playing with fire. You will surely burn your hands in the end. As per data shared by Nithin Kamath, Founder Zerodha ‘99% of F&O traders get less than 7% returns’, which is even less than what FD provides.”
“Young people get lured into F&O for quick gains seeing the Influencers on X and Telegram sharing huge profit screenshots and their lavish lifestyle. It is important to understand to learn the basics of F&O first, practice it with a small amount and develop temperament before going all out in F&Os. It is a full time job which people do casually,” he added.
F&O trading involves predicting future price movements or protecting against potential risks. Although it can be profitable, it demands a solid understanding of the associated risks. For inexperienced investors, it offers more risks than benefits.
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