Trading in the financial markets was originally a domain dominated by institutional giants. However, over the past decade, the Indian bourses have been recording rising retail trader activity. The momentum has been particularly high in the last 5 years or so because individual trader participation in the F&O segment alone grew by over 500% from FY19 to FY22. Additionally, in 2023, the F&O market recorded over 85 billion trades in options contracts from Indian traders — which is significantly more than the volume in any other global market.

Most analysts and experts view this as an optimistic sign. After all, increased individual investor activity in the markets — particularly in volatile segments like the options and futures market — may indicate more disposable capital in the hands of the average Indian trader.

However, a parallel narrative runs alongside this favourable development — where traders are often perceived (and misunderstood) as gamblers who are only looking for an opportunity to earn a quick buck. This may be true for a small margin of traders, who are mostly beginners with little to no awareness of the science behind stock and security trading. But for the vast majority of traders who are committed to the practice of studying the markets and making calculated transactions, this stigma is a cross they have to unfairly bear.

What Drives the Misconception that Options Trading = Gambling
Options trading is frequently misunderstood by the general public, and this perception stems from a variety of reasons. Primarily, the complex nature of options and the high volatility associated with them can lead to quick, significant losses or gains.

Another factor is the short-term trading strategies often employed in options trading.

Nilesh Sharma, President & ED at SAMCO Securities, pinpoints other crucial factors driving such myths about the calculated science of options trading.

“The terminology used in options trading also contributes to its gambling-like image. Terms such as ‘betting,’ ‘speculating,’ or ‘playing the market’ are commonly used in trading circles. This language naturally evokes gambling connotations, making it easy for the uninitiated to draw parallels between the two activities.

It also doesn’t help that the portrayal of options trading in media and popular culture often emphasises its most dramatic aspects — like overnight fortunes made or lost. This further reinforces the gambling stereotype. Such stories highlight the volatility and unpredictability of options trading without providing the context of careful research, risk management and strategy that successful traders employ.”

While the reasons driving this false perception may be many, its impact on committed traders is singularly discouraging.

The Impact of This Misconception on Committed Traders
The growing stigma around trading in general (and options trading in particular) affects the morale and societal standing of those who trade professionally or full-time. Simply someone who’s always sitting around at home, affect the individual self-esteem of traders and reflect the deep-seated scepticism around options trading.

This stigma also indicates that the uninformed often believe traders engage in reckless speculation without any real contribution to the economy or society. Such a view disregards the critical role traders play in financial markets — like enabling liquidity, facilitating price discovery, and promoting risk management. The constant battle against this stereotype challenges the professional identity of traders and can lead to a sense of isolation or disillusionment.

Moreover, the misperception of trading as a skilled profession hinders its recognition as a legitimate career. Many traders dedicate significant time to education, market analysis and strategy development. They employ sophisticated tools and models to make informed decisions. However, the narrative that reduces their work to mere chance diminishes the value of their skills and expertise.

The Myth vs the Truth: Trading is a Science and an Art
Contrary to the perception of traders as reckless speculators, options trading is both a science and an art. It requires a blend of analytical skills, rigorous discipline and data-driven insights. This duality is crucial for understanding the professional approach many traders in India and around the world adopt towards their craft.

The scientific aspect of trading is rooted in its reliance on quantitative analysis, statistical models and algorithmic strategies. Traders employ a variety of tools to analyse market data, financial trends and economic indicators. Additionally, traders also need to keep up with the economic developments around the world. These aspects bring to light the seriousness with which they approach their profession. It tells us that trading is a serious business.

Options BRO from SAMCO Securities Emerges as the Knight in Shining Armour
Amidst the rising stigma against short-term stock or options trading, SAMCO Securities has taken a stand for traders and launched a compelling film that pays a touching tribute to this community. The brand film takes us through a day in the life of a professional trader, the slights he has to endure from those in his social circle and the many misconceptions that even otherwise educated people seem to hold on to. The story also reveals the truth — rather, the hidden truth or the Andekha Sach — about what trading truly entails.

Speaking of this brand film and the tribute it attempts to pay traders, Nilesh Sharma shares his views on the need of the hour for active and interested traders.

“Traders invest an immense amount of effort and skill to navigate the complexities of the market. Their aim is not just personal gain but securing a future where their families can attain significant milestones with greater ease. The journey of a trader is one of profound commitment, where each decision is a step towards creating a stable foundation for themselves and their loved ones.

At SAMCO, our goal is to empower traders in particular and the society at large to transcend the simplistic and erroneous narrative of trading as gambling. To this end, we are committed to providing traders access to sophisticated scientific and analytical tools. These resources are designed to empower our clients to make calculated, well-informed decisions.”

To this end, the latest offering from SAMCO Securities is Options BRO, a revolutionary tool that SAMCO created to empower the trading community. Available free of cost to customers using the SAMCO trading app, this options strategy builder makes it easy for traders to build, research and optimise their trading strategies before entering the market. What’s more, traders can use different filters to sort through strategies based on the maximum profit or loss, probability of profit, risk-reward ratio and margin required.

Options BRO also factors in all essential technical indicators like delta, gamma, theta, vega, implied volatility and open interest, so the strategies suggested align with the trader’s market outlook and risk profile. This level of in-depth analysis is completed within just a few seconds, so traders can capitalise on market opportunities as and when they arise — all while employing strategies backed by real-time market data.

Ultimately, what Options BRO does is simple yet revolutionary. It takes data that is not always easily accessible to traders, analyses and evaluates them within record times and creates a framework of options trading strategies that can be customised to each trader’s risk-reward profile. It marks conscious and deliberate trading decisions driven by data and information.

By promoting awareness about this among traders and those who misjudge them, SAMCO Securities is steadily bringing the truth to light — one successful trader at a time.

About SAMCO Securities

SAMCO Securities was incorporated by Mr Jimeet Modi, Founder & CEO of SAMCO Group in 2015. As the country’s leading flat-fee brokerage and wealth-tech platform, SAMCO Securities provides retail investors access to sophisticated financial technology and makes their wealth-creation journey simple, informed, and cost-effective. SAMCO Securities’ mission is to eliminate the existing challenges faced by traders and investors and democratise access to the wealth management process for every Indian. With customer centricity at SAMCO’s core, we implement a quantitative approach to provide differentiated solutions that empower our customers in acing the capital markets.

SAMCO Securities is pioneering the stock market trading by introducing industry-first features like My Trade Story, Personal Index and Trade Spread Sheet to name a few under its CRP strategy.