gambling isn't investing

If yes or no, you’ve most def scrolled and paused after looking at an Indian trader showing how he’s living a life like the above thanks to stocks.

It is attractive. Very in fact. Makes you question:

1. Why am I working so hard at this job?
2. Why should I do JEE / UPSC / CAT etc
3. Let’s try this

But very few people actually see the other side of this:

This is an example of symptoms of India's hidden epidemic: trading app addiction disguised as financial empowerment.

SEBI's September 2024 study revealed what the industry desperately wanted to hide:

93% of individual F&O traders lost money between FY22-FY24.

Total losses: ₹1.8 lakh crore. 
Average loss per trader: ₹2 lakh.

But here's what the headlines missed: only 1% of traders earned profits exceeding ₹1 lakh after transaction costs.

The top 3.5% of loss-makers faced average losses of ₹28 lakh each.

Can we really call this investing?
It's wealth transfer from retail Indians to institutional algorithms.

Yet demat accounts exploded from 4 crore to 19.24 crore in just five years, with 30 lakh new accounts opening monthly at peak periods.

The demographic shift is striking: 43% of F&O traders are now under 30, down from an average investor age of 38 in 2018 to 32 today.

We're watching an entire generation destroy their financial futures. Why?

Trading apps have mastered behavioral manipulation with surgical precision.

The UK's Financial Conduct Authority went further, testing these features on 9,000 consumers. Push notifications and prize draws increased risky trades by 6-8%, with the strongest impact on young investors aged 18-34.

Plus, trading activates your brain's ventral striatum, the same reward center triggered by cocaine and gambling. Research shows that intermittent reinforcement schedules create stronger dopamine responses than predictable rewards.

This explains why 75% of loss-making traders continue trading despite consecutive years of losses.

They're not bad at math.
They're neurologically hijacked.

Indian platforms have weaponized this understanding.

Platform’s clean interface masks sophisticated triggers: real-time P&L updates creating "near-miss" effects, social features showing friends' portfolios to exploit FOMO.

Plus referral programs and instant account opening reduce friction to near zero.

The result?

India now accounts for two-thirds of all global index options trades. A statistical impossibility without mass speculation.

Is this an income thing? Cultural thing?

Think about it. The traditional middle class, where 65% of household income goes to essentials, faces a collision between ancestral financial conservatism and modern get-rich-quick marketing.

Instagram influencers with millions of followers broadcast lifestyle content, luxury cars, international vacations, all attributed to trading success.

The December 2024 "Baap of Charts" scandal exposed the reality: SEBI ordered Mohammad Nasiruddin Ansari to refund ₹17 crore collected from followers after discovering he personally lost ₹2.89 crore while claiming 95% accuracy.

WhatsApp and Telegram groups multiply these influences exponentially.

A quick investigation uncovered systematic scam operations: groups promising "guaranteed ₹1000-1500 daily profits" after free trials, then charging ₹10,000-50,000 monthly fees.

Police data from Pune alone shows 272 residents lost ₹125+ crore to trading scams in 2024, averaging ₹45 lakh per victim.

Family pressure creates the final accelerant.

Young professionals earning ₹30,000-50,000 monthly face expectations to support parents' retirement, fund siblings' education, save for weddings costing years of income.

When traditional investments yield 6-7% against 6% inflation, trading appears as the only escape from middle-class struggles.

The shame of failure prevents disclosure.

Education loans, gold mortgages, microfinance app borrowings fund desperate recovery attempts.

The business model built on your losses

Understanding how trading apps profit from customer losses reveals the systematic nature of this crisis.

A popular platform made close to a billion dollars in revenue last financial year. With profit margins over 50%. 

The genius lies in targeting F&O traders who generate 90% of volumes despite 93% losing money.

A trader losing ₹2 lakh typically pays ₹26,000 in transaction costs annually.

A 13% "addiction tax" on their losses.

Competitors chase growth through darker methods.

Another platform spends ₹300 crore on referral programs, paying ₹1,200 per new account.

The targeting is surgical: over 4 in 5 of their customers come from Tier 2/3 cities where financial literacy is lowest.

The conflict remains unresolved: brokers profit from the very behaviors destroying their customers.

The human cost extends far beyond money.

A third-year BTech student with zero income lost ₹46 lakh over two years.

The money came from parents, bank loans, microfinance apps.

When confronted, his response was heartbreaking: "I can't help it; I am addicted and unable to quit."

Marriage destruction follows predictable patterns.

One couple accumulated ₹35 lakh in trading debt by 2018. The husband cleared it, mortgaging gold and negotiating with banks.

The addiction returned: another ₹8 lakh borrowed from a family friend who filed false cases to recover money.

After standing by his wife twice, the husband now considers divorce "to secure daughter's future."

These aren't outliers. They're predictable outcomes of addiction mechanics designed to extract maximum value from human weakness.

What parents and families can do now

The warning signs should be taught like symptoms of heart disease:

Inability to stop trading despite losses.
Preoccupation when not trading.
Hiding activities from family.
Trading with borrowed money.
Extreme mood swings based on P&L.

Physical symptoms indicate advanced addiction: sleep loss from watching global markets, anxiety when unable to trade, stimulant use for perceived "edge."

Financial red flags include breaking predetermined loss limits, increasing position sizes for the same emotional hit, inability to walk away after big wins or losses.

The most powerful intervention is transparency in families.

India stands at an inflection point.

The same demographic dividend that could power decades of growth is being hollowed out by trading addiction.

Young Indians who should be building careers, starting businesses, accumulating wealth for families instead donate savings to algorithmic traders.

The ₹1.8 lakh crore lost by retail traders in three years could have funded hundreds of thousands of small businesses, millions of education loans, or simply compounded into generational wealth through systematic investing.

The tragedy isn't that people lose money investing.

Risk is inherent to markets.

The tragedy is that an entire generation has been deceived into thinking gambling is investing.

99% of F&O traders failing isn't a skill issue. It's mathematical inevitability in a negative-sum game after costs.

India's trading app addiction represents capitalism's darkest achievement: converting human weakness into corporate profit with such efficiency that victims thank their destroyers for the opportunity.

The alternative watching another generation destroy their futures, one notification at a time is a price no society should pay for the illusion of democratized finance.

Financial literacy and regulation on F&O is required at an all time high. 

Hit reply and tell me: Have you noticed these warning signs in someone you know?

I read every email.

Until next week,
Ritesh

P.S: Remember, the house always wins. In India's great trading casino, the house wears the mask of empowerment while systematically transferring wealth from those who can least afford to lose. That's destruction.