Young Traders Indulge In High-Risk Investments To Fund Luxury, Warns Edelweiss' Radhika Gupta

Radhika Gupta shared a screenshot from the Economic Survey 2023-24, highlighting the dangers of such financial behaviour

Radhika Gupta's message has garnered over 437,000 views. Reactions in the comments section have been mixed.

Source : X

Radhika Gupta, managing director (MD) and chief executive officer (CEO) of Edelweiss Mutual Fund, has once again taken to social media to offer financial advice. In her latest post on X (formerly Twitter), she voiced concerns about young people funding luxurious lifestyles through high-risk investments.

"I have seen people in their 20s saying they don't need to work because they are busy doing F&O. Young women who say their lifestyle and handbags are funded by trading gains," Gupta wrote.

She also shared a screenshot from the Economic Survey 2023-24, highlighting the dangers of such financial behaviour. "The Economic Survey highlights this in some very strong language. Other regulators have also rightly and repeatedly warned us about this," she noted, calling for urgent action to address the issue.

I have seen people in their 20s saying they don’t need to work, because they are busy doing F&O. Young women who say their lifestyle and handbags are funded by trading gains.

The Economic Survey highlights this in some very strong language. Other regulators have also rightly… pic.twitter.com/EeEb3l1gJm

— Radhika Gupta (@iRadhikaGupta) July 22, 2024

The Economic Survey revealed a significant increase in retail investor activity in India's capital markets. The number of unique tax IDs on the National Stock Exchange rose to 9.2 crore in FY24 from 2.7 crore in FY19. Many of these new investors are young people, who are increasingly engaging in derivatives trading, especially on expiration days.

"Derivatives trading holds the potential for outsized gains. Thus, it caters to humans' gambling instincts and can augment income if profitable," the Economic Survey stated. However, it also warned that while derivatives can offer high returns, they come with substantial risks that many young investors might not fully comprehend.

"A significant stock correction could see losses that are more considerable for retail investors participating in capital markets through derivatives," the survey added. It pointed out that large losses might deter future market participation by retail investors, which would negatively impact both the economy and the individuals involved.

Since posting her concerns, Gupta's message has garnered over 437,000 views. Reactions in the comments section have been mixed.

"20-25 year olds are talking about crores they have made with trading where they don't feel the need to ever work. This is all on YouTube podcasts peddling fire and financial freedom to people in their 20s. Something is seriously wrong when there is such a dearth of jobs on one side and educated youngsters entering the workforce. About time something is done," one user commented.

As the debate continues, the call for regulatory action to curb risky investments by young people gains momentum.