Opinion: When stock trading feels like a game — hidden risks for India’s young investors

Young investors are entering financial markets at record levels, driven by digital platforms that prioritise speed over judgment

By Aayush Joshi, Krish Swapnil Naik, Shrirang Ramdas Chaudhari

India’s sustained trend of strengthening digital infrastructure is undergoing a quiet but seismic shift into its financial landscape. For decades, Indian civic finance operated within a classical cultural baggage of high caution — a savings-first ethos, deep-rooted risk aversion, and a preference for familiar, low-volatility instruments, which is now undergoing a demographic realignment that integrates new forms of financial capital that cut across age, gender, employment categories, and sources of income.

---

The National Stock Exchange reports a striking recalibration of the average market participant. It noted that 40 per cent of all registered investors are now under the age of 30, driving the median age of the Indian investor down from 38 in 2018 to just 32 today. The monthly SIP (Systematic Investment Plan) inflow of Rs 29,529 crore recorded in October 2025, with over half contributed by this under-30 cohort, suggests a generation stepping into financial markets with unprecedented confidence.

Sociological Shift

However, to view this solely as a sign of economic maturity would be a misdiagnosis. Instead, it reveals a sociological shift in which young Indians are navigating complex markets within digital environments that incentivise impulse, speed, and emotional volatility over the slow, compounding nature of genuine wealth creation.

Academic research reveals clear differences between new investors and earlier generations. Younger cohorts, shaped by pervasive digital financial infrastructure, exhibit distinct risk preferences and investment behaviours compared to their predecessors (Sreelakshmi & Arun, 2023), marking a significant shift in India’s financial motives and market participation patterns. The medium has fundamentally altered the message. Today’s young investors do not encounter the markets through the sober lens of brokers or workplace schemes, but through the hyper-efficient interfaces of their smartphones.

With 80 per cent of this demographic trading primarily through discount brokerage apps like Zerodha, Groww, and Upstox, the entry friction has all but vanished. While these platforms have successfully democratised access, allowing students and first-time earners to participate in the equity cult, this very ease has distorted the perception of risk. With equities now the preferred asset class for 45 per cent of Indians under 35, the market is being embraced by a cohort that lacks the necessary literacy to navigate it safely.

There is a widening gap between access and competence. RBI–National Centre for Financial Education (NCFE) surveys indicate that financial literacy among India’s youth remains stagnant at 27 per cent, a statistic that barely improves even among active traders. The source of their capital exacerbates this deficit; many student investors trade with stipends, pocket money, or borrowed funds.

Consequently, the psychological weight of every transaction is amplified. In this context, a minor gain is celebrated as a personal triumph, while a loss is felt as a devastating failure. Rather than a disciplined apprenticeship in capital allocation, investing becomes an exercise in emotional regulation. This is further complicated by family-operated demat accounts where minors trade in the name of guardians, diffusing accountability and turning the market into a low-stakes sandbox for high-stakes habits.

Fintech Platforms

The architecture of modern fintech platforms bears significant responsibility for this behavioural shift. Whether by accident or design, trading apps have adopted the vernacular of the gaming industry. Real-time tickers, flashing colour-coded alerts, and instant execution loops trigger the same dopamine responses as mobile games. For a generation conditioned to expect digital instant gratification, the stock market has been reduced to an arena of micro-stimulations. The interface is no longer a neutral tool; it is an active participant that shapes behaviour, often encouraging activity over strategy.

Gaming-style trading apps are reshaping how young investors perceive risk and reward, reducing the stock market to an arena of micro-stimulation

This gamification effectively explains the alarming surge in youth participation in the futures and options (F&O) segment. Despite SEBI data confirming that 93 per cent of individual traders in F&O lose money, the under-30 demographic continues to flock to derivatives, mistaking hedging instruments for vehicles of accelerated wealth. This operational illiteracy — a fundamental misunderstanding of leverage, volatility, and time horizons — suggests that young investors are not managing risk, but actively courting it.

Rise of Finfluencer

The ecosystem surrounding these decisions is equally precarious. The rise of the finfluencer economy has challenged the traditional authority of financial advisers. A 2025 SEBI–Kantar survey found that 90 per cent of young investors view social media influencers as credible, with 62 per cent acting on recommendations without independent verification. Investing has thus evolved into a social performance; gains are often screenshot and circulated for validation, while losses are quietly concealed. When capital allocation is driven by viral visibility rather than fundamental analysis, the market becomes detached from economic reality.

The long-term implications for India’s economic resilience are profound. As household savings shift from traditional fixed instruments to market-linked products, the behavioural patterns of these first-time investors will increasingly influence market stability. A generation that faces early, preventable losses due to emotional burnout or confusion risks retreating from formal financial systems entirely, or worse, drifting toward unregulated, speculative assets. Early disillusionment could fracture India’s retail investor base at the precise moment the economy needs it to deepen.

Building a safer financial ecosystem does not require paternalistic restrictions, but rather choice architecture that encourages reflection. Fintech platforms must integrate behavioural guardrails, such as subtle friction points like cooling-off periods, clearer risk visualisations, and neutral user interfaces, to dampen the urge for impulsive action.

Furthermore, financial education must evolve beyond rote definitions to address the psychology of money. If we can design systems that slow the click and strengthen judgment, we can ensure that India’s demographic dividend enters the market not as impulsive players in a dopamine economy, but as resilient architects of the nation’s financial future.

• Data cited is drawn from publicly available reports by the National Stock Exchange (2024–2025), SEBI and SEBI–Kantar (2023–2025), the RBI–NCFE Financial Literacy Survey, AMFI’s monthly SIP statistics, industry analyses by Bain & Company and Groww (2025), and contemporary academic literature on behavioural finance.

 

(Aayush Joshi, Krish Swapnil Naik are students, and Shrirang Ramdas Chaudhari is Assistant Professor at the School of Business, Dr Viswanath Karad MIT World Peace University, Kothrud, Pune)