Inexperienced Retail Investors Getting On Options Trading Bandwagon, Regulators Concerned

Inexperienced Retail Investors Getting On Options Trading Bandwagon, Regulators Concerned
The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, on July 29, 2021. Andrew Kelly/Reuters
Naveen Athrappully
Updated:

An increasing number of retail investors are getting in on the options trading trend with nifty apps that make trading seem easy and fun, while regulators consider enhancing their oversight on risky bets by amateur players.

Options trading gives investors the right or “option” to buy or sell an amount of a specific asset at a predetermined price on a certain date. Most Main Street investors think of trading options as an easy option to turn a quick high-margin profit. With a record of almost 39 million options contracts, on average, traded daily, there has been an increase of 25 percent during 2021 compared to the past year, based on data from Options Clearing Corp.

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