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NSE Chief warns of derivatives trading risks, advocates long-term investing

EditorAmbhini Aishwarya
Published 13/11/2023, 09:22 pm
© Reuters.

MUMBAI - Ashishkumar Chauhan, the head of the National Stock Exchange (NSE) of India, has recently emphasized the importance of long-term investment strategies over high-risk derivatives trading for retail investors. In his address, Chauhan pointed out the potential dangers associated with derivatives, suggesting that such practices could lead to negative experiences that may deter future participation in the stock market.

Chauhan's remarks come at a significant time as he spoke during the Muhurat Trading session—a special trading window on the occasion of Diwali, which is considered auspicious by many investors in India. This event is traditionally seen as a time for making strategic investments and is symbolic of the financial community's collective hopes and ambitions.

The NSE chief stressed that while derivatives trading can offer high returns, it comes with an equally high level of risk, especially for those who are not professional traders. He warned retail investors about the complexity and volatility associated with these financial instruments and cautioned them against engaging with unregulated products that could pose additional risks.

To safeguard their investments and ensure sustained wealth accumulation, Chauhan advised investors to engage only with registered intermediaries. By doing so, they can avoid the pitfalls that often accompany unregulated markets and products.

Chauhan's advocacy for long-term investing aligns with India's broader economic growth narrative. He suggests that by focusing on long-term wealth creation strategies, investors can more safely capitalize on India's economic expansion.

The message from the NSE head underscores the exchange's commitment to promoting a responsible investment culture in India. By encouraging adherence to regulated channels and emphasizing strategic, long-term approaches to investing, Chauhan aims to foster a stable and prosperous financial environment for all market participants.

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