Student ‘addicted to trading’ loses ₹46 lakh in F&O, gambles with ‘personal loans, borrowings’

A Chartered Accountant, Roshan Agarwal, shared a cautionary tale on social media platform X (formerly Twitter) about a third-year BTech student who incurred substantial losses amounting to ₹46 lakh in Futures & Options (F&O) trading. 

Sharing his experience filing the income tax returns (ITR) for a third-year BTech student, Agarwal posted that he suffered a loss of ₹26 lakh on “zero income” this year alone, following losses of nearly ₹20 lakh in the previous year.

Agarwal, managing partner at Agarwal Roshan & Associates, revealed that despite advising the student against pursuing quick income through F&O trading last year, the student returned to trading and faced even larger losses this year.

“Yesterday I filed one ITR of a 3rd year BTech student whose income is zero but loss from F&O is 26 lakh. Last year too he had around ₹20 lakh F&O loss. Last year I tried to convince him not to take shortcuts for quick income and leave F&O and he was convinced. But this year he was back with bigger loss (SIC),” Agarwal, managing partner of Agarwal Roshan & Associates, posted.

He said that the student claims to be “addicted to trading” and “unable to quit”. “I asked him the reason; he said he is addicted to trading and is unable to quit,” Agarwal wrote.

When X users asked how a non-earning student was funding the expensive habit, the CA replied: “Personal loan, loan from friends, taking money from parents accounts (I think his parents are not aware of the same).”

‘Finfluencers to Blame’

Agarwal was critical of financial influencers (“finfluencers”) who have “glamourised” quick money by flashing their lifestyle and crediting trading for the income influx. “Dreams of quick rich scheme is being sold by some influencers on Instagram and Telegram. Feel sad for the innocent who fall prey to these (SIC),” he added.

“On social media, you will only see a profit. You will never see a trader talking about his losses. Young people are influenced by these social media creators. People sell courses on Telegram on F&O trading,” Agarwal told Hindustan Times.

Asking common people to steer clear of F&O, he placed the blame squarely on “get-rich schemes” and cautioned inexperienced people against falling for them.

“Trading in F&O without the expertise and practice needed is like playing with fire. You will surely burn your hands in the end. As per data shared by Nithin Kamath, Founder Zerodha ‘99 percent of F&O traders get less than 7 percent returns’, which is even less than what FD provides,” he explained.

“Young people get lured into F&O for quick gains seeing the Influencers on X and Telegram sharing huge profit screenshots and their lavish lifestyle. It is important to understand to learn the basics of F&O first, practice it with a small amount and develop temperament before going all out in F&Os. It is a full time job which people do casually (SIC),” Aggarwal added.

What is F&O Trading?

F&O are a particular kind of trading instrument falling in the category of derivatives. A derivative is a contract that derives its value from an underlying financial asset. Under F&O trading, the investor doesn’t necessarily have to buy the underlying asset but can gain from its price fluctuations in the market.