F&o Frenzy Is A Shortcut To Bankruptcy: Devina Mehra Warns Retail Investors

In an exclusive speech pinch Business Today TV's Sakshi Batra, First Global Chairperson Devina Mehra lays bare nan realities of today’s market—from nan risks of chasing F&O dreams to nan myths astir “buy and forget” investing. Cautioning against hype-driven strategies, Mehra emphasizes nan powerfulness of boring, disciplined investing, world diversification, and nan value of staying nan course. Whether you're a caller investor aliases a seasoned marketplace participant, this is simply a masterclass successful what matters—and what doesn't—in today’s investing landscape. Edited Excerpts

Sakshi: Where do we presently guidelines successful nan marketplace cycle?

Devina Mehra: We’re not successful a euphoric bull run, nor a heavy correction. Structurally, Indian macros are improving—GST collections are strong, crude lipid is nether control, and ostentation is cooling. That’s supportive of earnings, but yes, valuations are stretched successful pockets.

What worries maine is nan obsession pinch trading, particularly F&O. I often say, “boring investing works.” If your portfolio makes you excited each day, you're doing it wrong. Proper plus allocation, avoiding utmost risk, sectoral balance, and world diversification—these are what compound wealth. Timing markets is futile; staying invested matters. Missing conscionable nan apical 10 days successful 40 years could costs you two-thirds of your returns. Most communal money investors don’t moreover enactment invested for 2 years. The subject to enactment nan people is rare—but essential.

Sakshi: What’s driving this F&O frenzy then? Why is everyone chasing derivatives?

Devina Mehra: It’s nan illusion of speedy wealth. Derivatives committedness leverage, and societal media amplifies nan fewer who sewage lucky. SEBI information is clear—93% suffer money successful derivatives. My ain study showed nan fewer who profit are mostly institutions aliases blase players. Retail traders, particularly those from non-metro, lower-income, aliases less-educated backgrounds, are nan worst hit. Let’s not glorify outliers. Even Late Rakesh Jhunjhunwala, erstwhile he was asked “Why do you inquire group not to waste and acquisition erstwhile you yourself started arsenic a trader?”, had said, "I fume but I show my children not to."

Just because personification succeeded doesn’t mean it’s replicable. F&O trading is not a shortcut to wealth; it’s often a shortcut to bankruptcy.

Sakshi: Is unit losing money because of players for illustration Jane Street manipulating nan system?

Devina Mehra: When you pit quality traders against machines, particularly highly blase algos, it’s an uneven fight. But nan Jane Street rumor goes deeper. In astir trading strategies, nan bigger you become, nan harder it is to prolong returns. But Jane Street was making much money arsenic their size grew. That’s a reddish flag. The SEBI bid shows they utilized their size to extract unfair profits. Their profitability accrued pinch scale, which shouldn’t hap successful a competitory market—but that’s conscionable 1 portion of nan problem.

Even without manipulation, nan likelihood are stacked against retail. You’re playing a zero-sum crippled wherever nan large guys person amended tools, data, and speed. And moreover erstwhile immoderate make money—it’s peanuts. NSE information shows that among unit traders who were profitable, nan median yearly summation was conscionable ₹60,000. That’s ₹5,000 a month—less than a gig job.

Meanwhile, platforms, brokers, and influencers mint money trading trading dreams. As I ever say, “The existent money is successful trading nan shovels successful nan golden rush, not digging for gold.” I would be aware investors to enactment distant from group who waste trading courses by offering a guaranteed 1% regular return. If personification had that magic wand, why would they waste courses for a fewer 1000 rupees?

Sakshi: Should unit person specified unfastened entree to F&O markets?

Devina Mehra: Volumes successful Indian derivatives are acold beyond world norms. Even aft SEBI’s restrictions, India’s F&O to rate measurement ratio is still acold higher than anyplace other successful nan world. No different marketplace moreover comes close.

Too galore stakeholders use from precocious volumes—brokers, fintech platforms, moreover banal exchanges. And now that exchanges are listed, they want to support showing profit growth, which comes from precocious trading volumes.

But here’s nan problem—stock exchanges are besides first-level regulators. And that creates a conflict of interest. They tin often spot patterns earlier SEBI, but do they act? Not always. Because it whitethorn effect their bottommost line.

Even successful this year’s Union Budget, erstwhile individual income taxation was cut, nan projections assumed a 14–15% emergence successful collections from individuals—much higher than from GST aliases firm tax. That intends nan authorities expected trading volumes to enactment high. I jokingly said: SEBI wants to curb speculation, but nan fund depends connected it continuing!

So yes, unit needs protection. Because correct now, nan strategy isn’t built for them.

Sakshi: Could SEBI person acted earlier connected Jane Street?

Devina Mehra: Regulators activity nether constraints. They can't enactment connected each reddish emblem successful existent clip and processes return time. You request a water-tight case, aliases it gets thrown retired later. While banal exchanges tin beryllium much proactive—but it is easier said than done—it is unrealistic to expect instant action connected each reddish flag.

Sakshi: What is nan learning for F&O traders from nan Jane Street episode?

Devina Mehra: Don’t do it. Trading is not a sensible wealth-building strategy for astir people. Even erstwhile personification asked Rakesh Jhunjhunwala, “Why do you show group not to waste and acquisition while you yourself person made money by trading?” he had said, “I smoke, but I show my children not to.”

The existent mobility is: what happened to everyone who tried this strategy? 90–95% of group neglect aliases spell bankrupt wrong a fewer years. A fistful succeed—but chasing outliers is not a strategy. Also, galore of those past gains came successful little businesslike markets wherever arbitrage existed—that separator is gone. Today, what’s your edge?
Most of what’s being sold successful trading courses is conscionable a fantasy—Sabz Bagh. Don’t autumn for it.

Sakshi: What should young investors do instead?

Devina Mehra: Start investing—early. Delaying investing, moreover by 5 years, tin dramatically summation really overmuch you request to prevention later. First, get your plus allocation right—never spell 100% into equities, moreover if you're young. Markets tin underperform moreover for 10 years. Life is uncertain; you’ll request liquidity for emergencies, home, car, education.

Build diversified portfolios, crossed plus classes and geographies. Dollar depreciation matters—what looks bully successful INR mightiness beryllium level successful USD. For instance, our world merchandise starts astatine conscionable $10,000—true world exposure, not conscionable US-focused.

Pick plus classes first (equity, debt), past structures (MFs, PMS, AIFs). And if you DIY, dainty yourself for illustration a money manager. Track performance. Would you springiness 100% of your money to that person? Probably not.

Sakshi: You often accent world diversification. What does that look for illustration now, beyond conscionable nan U.S.?

Devina Mehra: Diversification can’t beryllium static. Things change—sectors, geographies, everything. Just look astatine nan original Sensex. Most of those companies are irrelevant today.

Right now, we’ve gone underweight connected nan U.S., though it remains our largest holding. We’ve added vulnerability to Europe and proceed to beryllium overweight China and India. For perspective, betwixt 2003–07, nan U.S. returned conscionable 60%, while India gave 6x and Brazil 10x returns. Markets rotate. You request an progressive world strategy, not a set-it-and-forget-it mindset.

Sakshi: What astir nan “buy and forget” blue-chip philosophy?

Devina Mehra: It’s a story rooted successful survivorship bias. People mention HDFC Bank, but hide Global Trust Bank, Centurion, Times Bank—all failed. Even among Sensex 30, nan alleged "blue chips" person changed. 25 years ago, location wasn’t a azygous slope successful nan index. Today they dominate.

Even Warren Buffett—who group often quote successful this context—doesn’t clasp everything forever. Studies show Warren Buffett sells half of his holdings wrong six months and 85% wrong 2 years. If Buffett doesn’t person a crystal ball, who does?

Even Titan—one of my earliest picks—almost unopen down its jewellery biz aggregate times. In fact, retired of 4,000 listed Indian companies, only 17 person managed 10 consecutive years of profit growth. Just one—HDFC Bank—did it for 20. That’s really uncommon consistency is.

Sakshi Batra: Are you looking astatine gold, metallic aliases moreover crypto successful your plus allocation?

Devina Mehra: Yes, but successful moderation. Gold, possibly 5% of nan portfolio. Crypto—max 2–3%. Gold was nan only rate hedge for our grandmothers. That’s why they weren’t incorrect erstwhile they invested large successful gold.

But golden successful dollar position didn’t transverse its 1980 value till 2007. That’s 27 years. In fact, from 1980 to 1999, it dropped 60%. It’s much volatile than equities successful dollar terms.

With nan liberalised remittance scheme, world investing is now easy. ₹8 crore per twelvemonth per family tin legally beryllium invested overseas. So, there’s nary logic golden should stay your only hedge.

Sakshi: Looking astatine nan remainder of 2025, which sectors look promising to you?

Devina Mehra: We rebalance quarterly. As of now, we’re overweight Pharma and Auto Components—have been for 18 months. FMCG is besides emerging successful our models.

Banks—while I stay a cautious investor—are looking amended aft underperforming for astir of nan past 5 years. We’ve added banks recently, though still underweight.

Macros are improving—GDP beats, ostentation is down, nutrient prices are easing, crude lipid has softened. All that helps margins. The value of a home-cooked thali is down. That intends consumers mightiness yet person room for soap and shampoo again. Even complaint cuts could beryllium connected nan array later this year.

Sakshi: What are nan risks markets are staring at?

Devina Mehra: The existent consequence is ever what you didn’t spot coming. Everyone is engaged fighting yesterday’s war. But overall, nan marketplace setup is healthy.

When my book launched successful February, I said if you're waiting for a correction—act now. The Nifty’s up astir 15% since then. I ne'er springiness scale targets. But if you’ve decided connected your equity allocation, it’s clip to beryllium invested.