Retail investors should not be in F&O. Here is why.

SEBI's study found that 91 per cent of individual F&O (futures and options) traders lost money in FY25. In Episode 4 of The Systematic Edge, Gaurik Shah, fund manager at Mirae Asset Investment Managers India, explains why that number is not surprising and what institutional traders do differently. 

The conversation covers collar trades, pair trades, the operational risk hiding inside arbitrage and why Warren Buffett sold $35 billion worth of puts at the same time he was publicly calling derivatives weapons of mass destruction. Shah's answer to whether retail investors should be in F&O at all is direct: probably not. But understanding why reveals something important about how these tools actually work and what SIF is trying to change.