A ₹2 crore options trading loss brings the hidden risks of derivatives into sharp focus
A stark reminder of the dangers associated with high-risk derivatives trading emerged this week after a 30-year-old salaried professional revealed on Reddit that he had lost over ₹2 crore in options trading. The post, which quickly went viral, has triggered intense discussion among traders, investors and financial advisors about leverage, behavioural bias and the long-term impact of speculative losses on personal finances.
The man, who earns a monthly take-home salary of around ₹2.85 lakh, said what began as “side investing” gradually turned into compulsive options trading. In an attempt to recover mounting losses, he borrowed aggressively, pushing himself into a cycle of debt that has now become unsustainable.
How aggressive options trading turned income into overwhelming debt
In his detailed post, the individual outlined unsecured liabilities amounting to several lakhs across personal loans, overdraft facilities and credit cards from major lenders including HDFC Bank, Bajaj-linked NBFCs, and credit cards.
He wrote, “On paper, things look fine — but the reality is very different. Over the last few years, I got deeply into options trading… I’ve lost a very large amount of money (2 cr+), and to plug losses, I kept borrowing.”
Key aspects of his financial situation included:
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Multiple unsecured loans across banks and NBFCs
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High-interest credit card dues compounding losses
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Monthly EMIs exceeding manageable levels despite a strong salary
This pattern, experts say, is not uncommon among retail derivatives traders who underestimate risk and overestimate recovery potential.
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Default fears underline psychological toll of trading losses
The emotional strain of mounting debt was evident as the individual admitted he was willing to let his credit score be “destroyed” if it meant mental peace and a fresh start. He even considered moving his salary account to Axis Bank while maintaining nil balances in accounts linked to lenders such as State Bank of India.
“At this point, my EMIs plus interest are so high that even with my salary, there’s no realistic way to service everything without living in constant panic,” he wrote, adding that he had completely stopped trading and had no intention of returning to options markets.
Netizens urge caution, consolidation and professional advice
The Reddit community responded with a mix of empathy and practical guidance, warning that defaulting could lead to sustained recovery pressure and long-term credit damage. Many advised debt consolidation and prioritising repayment of high-interest liabilities.
One user suggested, “Try to talk with one of the bigger banks about consolidating your debt into a single loan. Even at higher interest, it could leave room for basic expenses and restore stability.”
Others stressed disciplined repayment sequencing:
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Clear credit card dues first due to the highest interest
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Address NBFC and overdraft loans next
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Focus on long-term restructuring instead of settlement defaults
Another netizen reassured him, “You are in a hole, but with decent pay, this should be doable if managed correctly.”
What this episode signals for markets and retail trading behaviour
While this is an individual case, it reflects a broader trend seen in Indian markets over recent years. Rising retail participation in options trading has coincided with increased volatility, particularly during sharp market swings. Episodes like this reinforce concerns raised by regulators and brokerages about excessive leverage and inadequate risk awareness among retail traders.
In the near term, such stories may not move benchmark indices, but they can influence sentiment. Market participants expect continued scrutiny of derivatives trading practices, with brokers tightening risk controls and investors becoming more cautious.
Impact on trader and investor portfolios going forward
For active traders, the incident underscores the need to reassess position sizing, leverage and stop-loss discipline. Options, while powerful hedging tools, can rapidly erode capital if used for speculative recovery trades.
Long-term investors may also draw important lessons:
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Avoid mixing long-term investing with high-risk short-term speculation
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Separate trading capital from core savings and family finances
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Focus on risk-adjusted returns rather than headline gains
As one financial advisor commented informally online, “Markets forgive patience, not desperation. Once emotion drives decisions, losses compound faster than profits.”
A cautionary tale that could shape future retail participation
Looking ahead, the episode may act as a wake-up call for many retail participants who view options trading as a quick route to wealth. With rising awareness of debt traps and mental health costs, investors may gravitate back toward disciplined investing and professional financial planning.
The man himself summed up his resolve clearly: “I’m not trying to run away. I just want a stable, honest life going forward.”
For India’s growing base of retail traders, his story stands as a powerful reminder that capital preservation, not constant trading, is often the true key to long-term financial survival.
