Herding and FOMO
When everyone around you seems to be getting rich, doing nothing feels like losing. That feeling is expensive.
Why herds form
Following the crowd felt safe for most of human history. In markets, it produces bubbles: hot IPOs, sector manias, penny stocks recommended in chat groups, and derivatives trading promoted as easy income.
The F&O lesson
SEBI studied individual traders in equity futures and options. Over FY 2022 to FY 2024, about 93% of them lost money, with aggregate losses of over ₹1.8 lakh crore, before counting trading costs. The popularity of F&O didn't make it profitable for the crowd; it made it profitable for the other side.
Defences
Keep a small “explore” allocation, 5% or less, if you want to try something new, so curiosity can't damage your core plan. Wait 30 days before acting on any tip. And ask who benefits if you act: a platform, a broker, a promoter or you.
Key takeaways
- 1Crowds create bubbles, not safety.
- 2SEBI found 9 in 10 individual F&O traders lose money.
- 3Limit experiments to a small explore allocation.
Finish this lesson
Reaching the end marks it complete. You can also mark it yourself.
Educational content, not investment advice. Figures are illustrative.