“Watching business channels on mute is key to my success,” claims a 13-year-old self-proclaimed “world’s youngest successful options trader” on financial influencer Vivek Bindra’s YouTube channel.
Bindra, who has 21 million followers, features the young trader, who asserts she earns at least “36-40%” in annual returns from options trading.
This is part of a growing trend where financial influencers showcase minors claiming impressive returns through options trading, even as the Securities and Exchange Board of India steers clear of regulating financial education.
“My dad told me the more we watch financial news on mute, the more we can focus on the numbers and the more your brain’s algo with get activated,” she tells Bindra about her trading strategies. Her LinkedIn profile shows she is pursuing a bachelor's in commerce.
In another video, two teenagers (aged 14-15) praise their “online stock market mentor”, Advduth Sathe, a Marathi YouTuber with 700,000 followers who sells courses on options trading. “I enjoy this more than my school classes,” one student declares on Sathe’s channel.
A report published by Sebi in 2023 said 9 out of 10 traders lose money in options trade. While the regulator is trying to discourage trading in the F&O market by increasing taxes and sending warning signals, it has not been able to curb the speculative market.
In fact, the combined turnover F&O volume of NSE and BSE was a whopping 80% of the global share in April 2024.
Sebi wants to stay out of regulating courses that it believes are meant for ‘investor education'.
“Somebody who is doing pure education, not giving specific stock advice and not making any claims of performance will be outside the purview of our regulation,” said Madhabi Puri Buch, chairperson of Sebi, in a recent board meeting while discussing a proposed regulation for influencers.
Back on Bindra's channel, the teenager claims she was able to turn the ‘share market into a sure market’ by consistently making 2-3% returns every month. “Most people who lose money according to Sebi’s study are options buyers. Options sellers like us fall in the other category,” she adds. “Not only me but everyone can earn 24-30% on the safer side yearly.”
Using her Zerodha console, she shows how people can make an 8% assured return by selling put and call options simultaneously on the Nifty index. The BCom student, however, does not mention that option selling can result in unlimited losses.
The market regulator's efforts to dissuade the F&O frenzy have fallen flat so far. The tax hikes and research reports have done little to deter retail investors from betting their life savings on the speculative market. Yet, as minors flaunt their “success” stories online, the line between education and risky speculation continues to blur.
“The lure of get-rich-quick is a very powerful intoxicant. Day trading, options trading and cryptos are currently thought to be sure ways of getting rich quick. There is a need to debunk this,” said Suresh Sadagopan, registered investment advisor and principal officer at Ladder7 Wealth Planners.
Sebi can commission a nationwide study to show how deleterious its effects are and how it erodes wealth and pushes investors behind, he added.
“Those who are luring ignorant individuals on YT or other places should be asked to show proof of their claims. To discourage such activities, the taxation can be like lottery as all these are speculative activities and not investments.” Sadagopan said.
