‘SEBI saved you from yourself’: Startup founder says real scam is believing you can beat F&O market

Retail investors in India lost over ₹1.05 lakh crore in the F&O segment in FY25 — a 41% spike from the previous year. Nine out of ten traders ended up in the red. As SEBI tightens rules to curb the fallout, one startup founder is calling out what many won’t: the real scam isn’t the market—it’s believing you can beat it without doing the work.

In a LinkedIn post, Rudra Rai, founder of a Mumbai-based startup, summed up the staggering losses in blunt terms: “Our salary can’t beat algorithmic trading.” He was referring to SEBI’s latest report showing that 91% of retail traders lost money in F&O during FY25—the same dismal ratio as the year before.

According to SEBI, retail investors together lost ₹1,05,603 crore last year in equity futures and options, even after accounting for transaction costs. While the regulator’s recent rule changes led to a drop in trading volumes—from 61.4 lakh unique traders in Q1 to 42.7 lakh in Q4—the damage was already done. “SEBI had to literally save you from yourself,” Rai wrote.

Rai called out the misplaced confidence that drives retail speculation: “Your ‘research’ is someone’s exit liquidity,” he warned. “You wouldn’t perform surgery after watching YouTube. Why trade derivatives after reading WhatsApp forwards?”

The post also criticized the mindset that fuels reckless bets—traders skipping financial planning, lacking emergency funds, and betting ₹50,000 on market “tips.” 

He argued the real divide isn’t between winners and losers, but between those treating F&O like a business versus those using it like a slot machine. “The 9% who profit treat F&O like a business. The 91% treat it like a casino,” Rai wrote.

The timing of the post is no accident. SEBI’s recent order against U.S.-based Jane Street, a major algorithmic trading firm, revealed gains of ₹36,700 crore over 26 months—₹4,850 crore of which SEBI alleges were illegal. The move has put fresh scrutiny on how global firms profit while Indian retail traders bleed.

With stricter rules now in place and participation falling, SEBI hopes to curb speculative excess. But as Rai’s post makes clear, regulation can only go so far—when belief outpaces understanding, losses follow.