KOCHI: We’ve said it before, and we’ll say it again – loudly, this time. The road into the world of F&O trading is not paved for individual investors.
F&O may look like a highway of quick riches, but it’s riddled with traps, and now Jane Street has shown us just how deep those potholes run.
For long businessbenchmark.news has urged individual traders to steer clear of the futures and options (F&O) markets.
This isn’t new for us. We’ve argued that F&O is a space built for institutions, professionals, and lightning-fast algorithms – not for salaried individuals trading from a mobile screen with ‘borrowed confidence’.
Let’s face the basic truth: understanding F&O trading – even in its cleanest, most textbook form – is tough. It requires deep knowledge of derivatives, volatility, interest rate parity, option greeks (set of vital risk measure), risk management, and expiry behaviors.
Cash vs derivatives market
Even if you do your homework, your biggest enemy is still the clock. That’s the fundamental difference between the cash and derivatives market.
In the equity market, you can afford to wait. You buy a stock, the price drops – you hold. Time is on your side. You can sell when the tide turns and your stock climbs above your purchase price.
But in the F&O market, there is a ticking bomb called expiry. No matter how right you are, your position will become worthless if you run out of time. And most retail traders do. They don’t just lose money. They bleed.
Devil is in the detail
Now add another layer of danger – the unseen hands. From the definitions and titles F&O may look tamable but as the saying goes, ‘devil is in the detail’.
Big players like Jane Street don’t just trade F&O contracts. They move them. They influence expiry-day index levels through massive cash and futures trades.
According to SEBI’s interim order, Jane Street engaged in large-scale expiry-day trading strategies that created false impressions of demand in the morning, only to reverse the trade in the afternoon and drag the index to levels that suited their earlier options bets.
A precise combination of cash, futures, and options trading – a strategy so complex, even professional traders may not fully anticipate it.
“And if professionals are being outplayed, where does that leave individual traders?”
Let’s talk numbers. SEBI’s latest study reveals a damning picture:
93 per cent of individual traders in the F&O segment incurred net losses between FY22 and FY24.
The total aggregate losses? Over Rs1.8 lakh crore or Rs1.8trillion.
That’s not a red flag – that’s a bonfire.
And here’s the kicker: these losses aren’t due to a lack of intelligence. They’re the result of structural disadvantage. The field is tilted.
The rules favour those who understand the inner workings of market microstructure, those who can afford to run losses for weeks to trigger gains in one afternoon, those who can influence index movements with sheer weight of capital.
In July 2025, SEBI passed an unprecedented order to impound Rs4,843 crore – alleged unlawful gains from Jane Street’s expiry-day trades.
The firm has now deposited that money in an escrow account, which means it can trade again, but only under strict conditions. SEBI’s investigation will continue for another 6–7 months.
Even while the regulator remains cautious, one thing is already clear: manipulation isn’t just a theory – it’s part of the game.
Can Sebi curbs save individual traders?
SEBI has done its part. It has imposed curbs. It has brought in net worth disclosures for F&O traders. It has limited weekly expiries. It has tightened margins. But even SEBI can’t shield your capital from your own decisions.
You’re up against trading firms that can deploy Rs5,000 crore in one session. You think you’re trading a pattern; they’re orchestrating it.
The truth is – the game is too fast, too complex, and too manipulated for the average individual. There is no shame in accepting that. In fact, it may save you lakhs.
Businessbenchmark.news has always believed that F&O is a hedging tool, not a casino chip. And options? They were designed to protect against risk – not amplify it.
But somewhere along the line, the market turned into a playground for gambling, and the gambler always thinks the next bet will bring redemption.
It won’t.
If the Jane Street saga has taught us anything, it’s this: the road you’re trying to take is already owned by those who know how to bend it.
