NSE CEO warns against derivatives trading for retail investors

NSE CEO Ashish Chauhan has urged retail investors to avoid trading in derivatives. He emphasized that these financial instruments can be complicated and risky for those who do not fully understand them. Chauhan spoke at the Business Today MindRush 2025 event, stating, "If you don’t understand the instrument, don’t touch it." He also warned against trusting market tips shared on social media platforms. Chauhan recommended that investors view such discussions as entertainment rather than reliable investment advice. His warnings follow reports of retail investors suffering losses in Futures and Options trading. To address these concerns, the Securities and Exchange Board of India (Sebi) has implemented new measures to protect investors. Chauhan indicated that these steps are already showing positive effects. He noted that only a small number of retail investors engage in derivatives trading, estimating that only about 2% of investors trade in this area monthly. Chauhan commented on ongoing global uncertainties, especially regarding US tariffs set to take effect on April 2. While he mentioned that the market has already adjusted to these expected tariffs, he warned that unexpected developments could impact investor confidence. Looking ahead to the IPO market, Chauhan observed that activity has decreased recently due to unfavorable market conditions. However, he remains optimistic about the future, as there are many companies ready to launch IPOs when the timing improves. He stated, "There is enough momentum in the IPO space."