11.46Why beginners should learn and practise before trading F&O
Time-sensitive: SEBI study published September 2024 covering FY2022–FY2024. Options STT is 0.15% of premium (sell side) from 1 April 2026. Rules and rates change, so check the official source before acting.
1What is it?
F&O combines leverage, time decay, volatility and complex payoffs. Mistakes are expensive and fast.
2Why does it exist?
SEBI data shows the vast majority of individual F&O traders lose money, and those who trade more frequently tend to lose more. Costs (STT, brokerage, slippage) add up quickly.
3Practical use
A sensible path:
- Finish Levels 1–10 and Level 12 (risk management) first.
- Paper-trade futures on MojoStox for at least 3–6 months; keep a journal.
- If you ever trade real money: only money you can afford to lose entirely, only limited-risk strategies, and tiny position sizes.
4Quick revision
- Most retail F&O traders lose.
- Practise with virtual money first.
- Use only limited-risk strategies and small sizes.
5Knowledge check
Q1. Roughly what share of individual F&O traders lost money (SEBI FY22–24)?Show answer
About 93%.
Q2. What should you practise with first?Show answer
Virtual money (paper trading).
Q3. Which strategies are safer for learning?Show answer
Limited-risk ones like spreads.