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Risk Disclosure

The real risks of trading securities, derivatives and commodities, and the limits of practising on paper.

Trading in equities, futures, options, commodities and crypto assets involves a high risk of loss, including loss of more than your initial capital in some derivative positions. Read this disclosure before relying on anything you practise here.

1. What regulators have found

According to studies published by SEBI, about 9 out of 10 individual traders in the equity futures and options segment incurred net losses; loss makers on average lost close to ₹50,000 and spent an additional 28% of their net losses on transaction costs, and even profitable traders spent 15% to 50% of their profits on transaction costs. Check SEBI's website for its latest studies.

2. Risks of derivatives

• Option sellers can lose far more than the premium received; option buyers can lose the whole premium.
• Leverage magnifies both gains and losses; margin requirements can rise suddenly.
• Prices can gap, liquidity can disappear and orders can be filled far from the expected price.
• Expiry-day moves, volatility changes and time decay can change option values sharply.
• Taxes, brokerage, statutory levies and slippage reduce returns.

3. Limits of paper trading

Simulated results ignore much of what happens in real markets, including your emotions, real fills, queue position, liquidity, broker rules and real margin calls. Good paper results do not mean you will make money with real money. See the Paper Trading Disclosure.

4. Your decision

Any real trading decision is yours alone. Consider your financial situation, and consider advice from a SEBI-registered investment adviser before trading. TradeToday Terminal does not give such advice.