options trading in india: Low index option premiums are like Jezebel, sinking retail traders. Prop traders, punters, too, flail

options trading in india: Low index option premiums are like Jezebel, sinking retail traders. Prop traders, punters, too, flail


Illustration by Muhabit ul haq via AI

Synopsis

The derivatives market in India is 400x bigger than the cash market. For the US market, the same number is only 9x. Even South Korea, where retail participation is high in the derivative segment, the same number is hardly 12x. So, what is the sheen that is acting as a magnet for retail participants into options trading?

Easy money is hard to resist. But is there such a thing such as easy money? This unattributed, albeit famous, quote is resonating in India’s teeming derivatives market. Like Jezebel, the wicked Biblical character who is seen as a harbinger of ruin. Ramachandra (name changed) is a 55-year-old salaried employee from Uttar Pradesh, who aspires to make a bounty by dabbling in the derivatives market. An options buyer, he has learnt the process

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Author: Shirley