Groww Invest Tech Private Limited (GIT), also known as the brokerage firm Groww, has launched new features to reduce losses for futures and options (F&O) traders in the country, according to the company’s press release on Tuesday, August 27.
F&O Pause, Safeguard, and Safe Exit are the three features that Groww launched to safeguard its trader’s wealth amid continuing market momentum, Groww said in the statement.
“Our new F&O features are designed to help traders navigate market volatility and avoid behavioural mistakes. It is part of a constant endeavour to productize our safety instincts at a buoyant and critical moment in the journey of Indian financial markets. We are consistent in our messaging that F&O bears high risk, so not everyone should participate,” Harsh Jain, co-founder and chief operating officer at Groww, said.
Benefits of the new F&O features:
As overtrading is fueling the traders’ capital erosion, Groww’s new “F&O Pause” feature allows traders to pause their F&O account during a market volatility period or when they try to break from a trade, according to the brokerage. This also allows the user to unpause it when they want to resume when they feel ready.
Through this new “F&O Pause” feature, Groww aims to enable platform users to maintain discipline and avoid costly errors. This feature, however, does not affect other mutual funds and stock investments. The users can continue trading and investing in those areas.
The new “Safeguard” risk management feature will discourage or deter F&O traders from experiencing consistent losses. If a trader experiences continued losses, they will be prompted about a potential halt in F&O trading activities on the Groww platform.
In such a case, the brokerage said the customers would have to provide additional information to prove suitable for resuming trading on Groww. If a trader fails to do it, their F&O account will be stopped after 30 days. Like the pause feature, it is limited to F&O trading, not mutual funds and stocks on the platform.
The brokerage also launched a “Safe Exit” feature for F&O that provides a safety net by automatically limiting a trader’s losses on their F&O positions. It helps them exit their trade positions once they cross the specified limit, similar to the stop loss setting while trading in the intraday equities market. Groww said this feature is expected to be highly beneficial during times of high market volatility and for retail traders looking to limit their risk exposure.
This move from the Indian brokerage comes when the capital markets regulator, the Securities and Exchanges Board of India (SEBI), remains concerned with the surging F&O market trading volumes and the rising losses in the domestic exchanges.
According to the Reserve Bank of India’s Financial Stability Report released in June 2024, the equities market saw a 42.8 per cent surge in trader participation to 95.7 lakh in the financial year 2023-24, compared to 65 lakh in the previous year.
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