TECHNOLOGY-ENABLED TRADING AND BEHAVIORAL BIASES OF RETAIL INVESTORS IN FUTURES AND OPTIONS MARKETS

Abstract

 The rapid diffusion of digital trading platforms, mobile applications and real-time market information has transformed retail participation in futures and options (F&O) markets. While technology has lowered entry barriers and enhanced market access, it has also amplified behavioral biases that influence investor decision-making. This study examines the interaction between technologyenabled trading and behavioral biases among retail investors participating in F&O markets in North India. Using a structured survey of retail derivative traders and applying descriptive statistics, reliability analysis and regression techniques, the research identifies the prevalence of key behavioral biases such as overconfidence, herding behavior, loss aversion and disposition effect. The findings indicate that ease of access, frequent notifications and gamified trading interfaces intensify trading frequency and risk-taking behavior, often leading to suboptimal investment outcomes. The study contributes to behavioral finance literature by highlighting how technological advancements interact with psychological factors in derivative markets and offers implications for investors, regulators and platform designers.