The Retail Trap in Derivatives Trading: A Longitudinal Study of Bank Nifty Options (2018–2024)

This article examines six years of retail trading in Bank Nifty options (2018–2024) not as a series of rational economic decisions, but as a recurring psychological and structural phenomenon: the Retail Trap. Drawing on trade data, behavioural patterns, and market microstructure, we argue that derivatives markets have become apparatuses of subjective entrapment—where hope, illusion of control, loss chasing, and engineered expiry rhythms converge. Retail traders do not simply lose money; they lose the capacity to exit. This longitudinal study traces the arc from initial attraction to gradual erosion, and concludes with prescriptive measures that acknowledge both structural reform and the tragic dimensions of financial desire.