The great Indian discount broking bazaar: Will SEBI play spoilsport?

About three weeks ago, a Reddit user posted on the popular IndianStreetBets subreddit, “I've seen doctors engaged in trading during market hours, teachers looking at their mobile every few minutes on their job, students talking about calls and puts in metros, Uber drivers constantly watching the trading screen while driving.”

Yet another post in the same week noted, “A BTech student lost Rs 26 lakh on F&O trading, reveals CA after filing ITR.”

It really is, as Dickens wrote, ‘the best of times, the worst of times, the age of wisdom, the age of foolishness’ in India’s capital markets.

Even as total demat accounts surged to a new record of 162 million and monthly SIP inflows into mutual funds hit an all-time high of Rs 21,260 crore in June, markets regulator Securities and Exchange Board of India (SEBI) isn’t breathing easy. Or as a two-decade-long trader told The CapTable, “Wherever there’s growth, there’s SEBI.”

While a plethora of discount brokers—which now occupy 64% of the overall market—have popularised the ‘investing’ mindset vis-a-vis the traditional ‘savings’ mindset among young Indians with their low-fee, seamless, tech-first offerings, their growth has also fuelled the country’s obsession with Futures & Options (F&Os), a far riskier asset class. It lets traders quickly make big bucks by speculating on future stock price movements.