'One should stop being greedy with options trading,' say netizens after man claims his colleague lost Rs 95 lakh in 1 day

Traders had a lot of thoughts over a post on X platform (formerly Twitter) where a man claimed his colleague lost Rs 95 lakh in one day through options trading. 

A person whose X handle is @oldschoolinvest and has 32,000 followers on the platform said on Thursday that his colleague earned Rs 1 crore in three years through option trading and lost 95% of that on Wednesday. This person had apparently earned Rs 1 crore in three years from options trading and lost most of that on Wednesday apart from the waste of hard work for sitting in front of the screen all these days.

"My colleague earned 1 cr rs. in 3 years from option trading. Yesterday he lost 95 lacs in a single day!
Loss of 95% capital and hard work (sitting 9:15 to 3:30 5 days a week is of course hard work) of 3 years in a single day," stated the post. 

Netizens said the person was reckless for losing so much money in one day and didn't understand risk management. 

"Always do options trading with stop loss and hedge," said an X user. 

"One should stop being greedy with options trading," said another X user. 

"That's why I stick to dividend stocks and Mutual fund SIPs," commented another netizen. 

"Anyone who claims that option trading is a skill and an art is lying. It’s ONLY gambling. Plain and simple. Looking at patterns and predicting the future stock prices is as accurate as reading tea leaves or parrots pulling cards out of stacks," said another X user. 

"Biggest issue with Options is you cannot keep a SL (stop loss), within no time option value will plunge by 50 to 60%. Should only done with smaller accounts for fun, not scalable like equities," quipped another X user. 

However, netizens said that the story sounds too good to be true and that this is "engagement farming", which refers to the practice of posting obvious things to garner likes and impressions on X to generate income by getting a blue tick.

As many as 89 per cent of the individual traders lost their money in the F&O segment in FY22; they witnessed an average loss of Rs 1.1 lakh during the year, according to market regulator Securities and Exchange Board of India.

While releasing a detailed study on the profit and loss of individual traders in the F&O segment, the study highlighted that the total number of unique individual traders who traded through the top 10 brokers in equity F&O segment jumped over 500 per cent to 45.2 lakh during FY22 as against 7.1 lakh during FY19.

Over and above the net trading losses incurred, loss makers expended an additional 28 per cent of net trading losses as transaction costs in FY22.