SRV Media
New Delhi [India], March 13: Options trading in India is a double-edged sword. On the upside, it can potentially generate significant profits if traders gauge the market correctly, set up adequate hedging mechanisms and time their entries and exits strategically. However, on the flip side, it can lead to tremendous losses if a trade is not planned and executed well.
This is precisely why a vast majority of options traders are unsuccessful in the F&O segment. As per a study conducted by the Securities and Exchange Board of India, 9 out of 10 traders (or 90% of retail participants) suffered losses in F&O trading in FY22. The average loss was not a meagre amount either; it amounted to Rs1.1 lakhs!
These significant losses can be traced back to various reasons -- but the foremost among them is that options traders do not have sufficient hedging strategies in place. Samco Securities analysed around 30,000 traders using the Samco trading app for over a year and found some unsettling insights:
* Of the sample chosen, 97.8% of the traders traded naked. The results? An average loss of Rs66,768.
* On the other hand, the 2.2% of traders who employed hedging strategies earned an average profit of Rs196,300.
To bridge this gap and smooth out this phenomenal difference, Samco Securities has developed Options BRO -- an industry-first options strategy builder that has been integrated into the Samco trading app. We spoke to Ajay Dusane, Chief Growth Officer at Samco Securities, to better understand the rationale behind the simple yet unique name for this flagship feature.
"Options BRO was named with a deep sense of camaraderie and support in mind, mirroring the bond of brotherhood. We intended our options strategy builder to be a guiding light for traders in the often complex and challenging world of options trading. This unique name signifies that Options BRO is not any average analytical tool; it represents a companion that is always present -- helping traders navigate through the markets with the winning strategy.
The 'BRO' in Options BRO stands for Build, Research and Optimise. These are the three foundational steps we believe every trader should go through to improve the chances of success in the F&O segment. We designed Options BRO to allow traders to easily build their trading strategies based on their market outlook, research these strategies in depth to understand potential outcomes, and optimise them according to their risk appetite and goals."
Options BRO was ultimately named thus because it reflects the essence of the options strategy builder -- which is almost like a brother who's always there for the trader, offering advice, showing them the ropes and helping you make the best decisions to protect and grow their money in the F&O market.
The Science Behind Naming a Fintech Feature
Naming a feature in the fintech world is an art and science combined. This crucial step can significantly influence how the feature is perceived, adopted and used by the target audience. The process involves a blend of creativity, strategic thinking and market research. Above all, it requires an understanding of the target audience's preferences and behaviours.
However, fintech brands often fall into the trap of choosing names that are complex and hard to pronounce -- leading to confusion and a disconnect with potential users. Samco Securities avoided this pitfall by adhering to the fundamentals and choosing a name that sums up its options strategy builder perfectly. Here are some techniques that are crucial for naming any new fintech feature.
* Understanding the Audience
The first step in naming a fintech feature involves a deep dive into understanding the target audience. Who are they? What are their needs and challenges? How do they interact with financial technologies? This foundational understanding ensures that the name resonates with the users and makes it memorable and easy to relate to. Despite this, some fintech companies opt for names that are overly technical or jargon-heavy, assuming they reflect sophistication. In reality, it may alienate users who seek simplicity and clarity in their financial transactions.
* Simplicity vs. Sophistication
In the quest to appear innovative and sophisticated, fintech brands sometimes choose names that are not only difficult to pronounce but also hard to remember. This complexity can be a significant barrier to widespread adoption, especially when users struggle to recall or even articulate the name of the feature. The irony lies in the fact that fintech aims to simplify finance, yet the naming convention can inadvertently complicate it. A straightforward name like Options BRO, which clearly conveys the feature's purpose or benefit, is often more effective in engaging users and fostering adoption.
* The Role of Market Research
Market research plays a pivotal role in naming a fintech feature. It involves analysing competitors, understanding market trends and gathering feedback from potential users. This research can highlight what works and what doesn't in the current market, thus making the naming process more purposeful. Despite the insights offered by market research, however, some fintech companies overlook the importance of simplicity and instead opt for names that stand out -- but do not necessarily communicate the feature's value proposition effectively.
* The Challenge of Nomenclature
A significant challenge in the fintech sector is the tendency to create a complex nomenclature for new features. This choice often stems from the desire to trademark unique names or to capture a broad spectrum of functionalities under a single term. However, such an approach can backfire if the name becomes too cumbersome or obscure. The key is finding a balance between uniqueness and accessibility to ensure that the name is both distinctive and easy to understand.
Decoding the Meaning of Options BRO
Samco's options strategy builder Options BRO is not named thus merely to reflect the brotherly guidance it offers. The letters are an acronym for 'Build, Research and Optimise' -- which are the three key functions performed by this tool. While BRO is an easy enough name to remember, it also encapsulates the fundamental benefits offered by the flagship options strategy builder.
Let's take a closer look at the three key functionalities that serve as the inspiration for naming Samco's Options BRO.
* Build
The 'Build' functionality in Options BRO is designed to empower traders by allowing them to construct personalised trading strategies from the ground up. By inputting their preferred contracts, expiry dates and market views, traders can utilise this feature to find the top three strategies that align with their trading style -- be it aggressive, moderate, or conservative. Additionally, the options strategy builder also suggests hundreds of other potential strategies that may be suitable for the expected market.
* Research
The 'Research' aspect of Options BRO offers a deep dive into each strategy's potential outcomes. This feature equips traders with comprehensive insights about the potential gains or losses across different scenarios. It also throws light on critical data points and options Greeks like the delta, theta, gamma and vega. Traders can also analyse the probability of profit, risk versus reward and the maximum profit and loss possible at different prices and on different target dates.
* Optimise
The 'Optimise' function in Options BRO makes it possible for traders to refine their strategies, so they align perfectly with their objectives and risk tolerance. This feature offers advanced filters based on criteria like risk level, probability of profit, maximum profit and loss and margin requirements. By enabling traders to adjust their strategies to meet specific needs, it helps identify the optimal path to carry out a successful trade.
Beyond the building, researching and optimisation of strategies, there's one more pioneering benefit offered by Options BRO. The options strategy builder is available free of cost to traders using the Samco trading app. In a market where even entry-level features are only available at a fee, Samco Securities is revolutionising options trading by offering all these comprehensive analytics free of charge, so every trader can become an options PRO with Samco's Options BRO.
About SAMCO Securities
SAMCO Securities was incorporated by Jimeet Modi, Founder & CEO of SAMCO Group in 2015. As the country's leading flat-fee brokerage and wealth-tech platform, SAMCO Securities provides retail investors access to sophisticated financial technology and makes their wealth-creation journey simple, informed, and cost-effective. SAMCO Securities' mission is to eliminate the existing challenges faced by traders and investors and democratise access to the wealth management process for every Indian. With customer centricity at SAMCO's core, we implement a quantitative approach to provide differentiated solutions that empower our customers in acing the capital markets.
SAMCO Securities is pioneering the stock market trading by introducing industry-first features like My Trade Story, Personal Index and Trade Spread Sheet to name a few under its CRP strategy.
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