--- title: "F&O red flags: tip groups, accuracy claims, SEBI checks" description: "Five questions for any F&O claim, tied to SEBI rules, with a far strike that wins most weeks by design and SEBI data on sellers, buyers and algo." source_url: "https://www.rupeecase.com/learn/path-12/module-12-8-fo-red-flags" --- [Path 12 8 of 9](/learn/path-12/)Red flags in F&O: tip groups, too good claims and registration checks[Next 12.9](/learn/path-12/module-12-9-fo-trading-behaviour) From 1 Jul 2026 a person who only teaches may not use market price data of the preceding thirty days to name a security in a way that points to its future price, or to advise or recommend on it. That is SEBI's circular of 8 May 2026. So every price on this school's pages is older than thirty days, this lesson's chain is from June 2026, and no page says where Nifty goes next. The rule is also the first test for any F&O page, post or group: does it show a live strike with a direction attached? If it does, it is doing something other than education, and SEBI treats that something as a registered activity. What follows is the short checklist I use on anything that promises money from F&O. It uses SEBI's own words wherever it can. 3By the end you can 1. Run five questions on any F&O claim and say which SEBI rule each one rests on. 2. Check whether a person is on SEBI's lists and whether a performance claim is allowed. 3. Explain why a high accuracy can be built in by choosing a far strike, using a dated chain. Watch in the terminal: which figures are mine? A short tutorial on sample data. ## The idea, plainly Think of a stranger selling a map. A fair map shows the roads as they were surveyed on a date. A red flag is a map that shows where the traffic will be tomorrow, and wants money for it. Five questions sort one from the other. Five questions that sort education from a sales pitch The order matters: a failure at the first two needs no further work. Each question is tied to a SEBI rule below. Source: SEBI Research Analysts Regulations 2014; SEBI Intermediaries Regulations 2008; SEBI circular of 8 May 2026. As of 16 Oct 2026. ### 1. Who is speaking? A strike to trade, a level to buy or exit at, or a call to trade is research work, and it needs SEBI registration as a research analyst or an investment adviser. SEBI's lists show the registration number and its status. A name that is not on them, or that differs from one by a letter, fails the first test. ### 2. What is promised? SEBI allows a claim of returns or performance only from registered advisers, research analysts and exchange empanelled algo providers, and only as risk and return metrics checked by an agency SEBI has recognised (Intermediaries Regulations, regulation 16E). Those agencies have been at work since 4 May 2026. A screenshot is not a verified record. ### 3. Is a live strike or level attached? Recent price data beside a named contract and a direction is not education. SEBI's interim order of 4 Dec 2025 held, prima facie, that live trade advice had been given as chart study, with levels and exits during market hours. It was an interim order, not a final finding. The test for any lesson, this one included: would the idea survive if the date on every price were a month older? The term this section turns on: Prima facie From the module glossary; every term is in the Learn glossary too. Source: Module 12.8, Red flags in F&O: tip groups, too good claims and registration checks. ### 4. Who is being paid? Free is not free if it earns a referral. Since 29 Aug 2024 a SEBI regulated broker or fund may not be associated with anyone who gives advice without registration or claims returns without permission, and association covers money, referrals and links between systems. A broker's name beside a tip service is a flag, not a comfort. ### 5. Can it be checked? A record counts only when someone outside has verified it, as in question 2. Algo claims get the same test. Algo providers do not register with SEBI as algo providers. They are empanelled with the exchanges, and a provider that sells a black box algo must also be a registered research analyst. Neither is a profit claim. SEBI's Aug 2026 profitability study found that in FY26, 99% of the gross profit of foreign portfolio investors and proprietary firms came from entities that placed at least one algo order. Those are firms with research teams, capital and speed. Algo describes how an order is sent, not whether the idea behind it earns. [Learn module 10.3](/learn/path-10/module-10-3-systematic-execution-in-india-apis-algos-and-sebi-rules) has the retail algo rules in full. ## Worked example: a claim against the 10 Jun 2026 chain Here is a composite claim, written for this lesson and not taken from any post: Model, not market data A far strike wins most weeks, and the few losses give back every win Each bar is the total in rupees per hundred weeks for one lot. Prices are fair, so nobody starts with an edge. Module F13 shows the same arithmetic on a call. Inputs: one lot of 65 units of the Nifty 22,500 put sold at its settlement premium of Rs 12.65 a unit on 10 Jun 2026, expiry 16 Jun 2026; the forward 23,229.26 and the option's own implied volatility 16.16% over 6 calendar days; the index at expiry follows a lognormal curve around the forward; 100 weeks; before costs and interest. Source: RupeeCase model, inputs from NSE end of day data. As of 10 Jun 2026. Sellers lost money least often, and lost the most per trader Groups are named by SEBI from each trader's first legs. The sellers are a very small group, about two percent of the sample, so SEBI calls the figures indicative. The share of losers is shown in each label. Source: SEBI, Trading Behaviour of Individual Traders in the Equity Derivatives Segment (FY25 to FY26), Aug 2026, Table 5. As of 20 Aug 2026. Five SEBI steps since Aug 2024 narrowed what anyone may claim or teach 1. 29 Aug 2024**The association rule**A SEBI regulated broker or fund may not be associated with anyone who gives advice without registration or claims returns without permission. 2. 21 Mar 2025**Verified metrics only**Registered advisers, research analysts and empanelled algo providers may claim returns only as metrics verified by a recognised agency. 3. 4 Dec 2025**An interim order on advice given as education**SEBI held, prima facie, that live trade advice was disguised as chart study. An interim order, not a final finding. 4. 4 May 2026**Verification agencies at work**Past risk and return verification is operating. 5. 1 Jul 2026**The thirty day rule applies to educators**No use of the preceding thirty days of price data to name a security in a way that points to its future price. Dates are the days each step took effect or was issued. The school follows the strictest of them. Source: SEBI Intermediaries Regulations 2008; SEBI circulars of 29 Jan 2025 and 8 May 2026; SEBI interim order of 4 Dec 2025. As of 16 Oct 2026. Read 3 more paragraphs, 168 words It names no registration number, so the first question fails. It promises accuracy, so the second fails. Now test the number itself. On the weekly chain of 10 Jun 2026 take the 22,500 put, which settled at 12.65 a unit, Rs 822 a lot. In the model below prices are fair and nobody has an edge, and this sale still wins 94 weeks in every hundred. The accuracy is real and it is by design: a far strike is rarely reached. The red bar is as long as the green one. About 3 weeks in a hundred supply 87% of the losses. Accuracy tells you where the strike sits, not what the seller earns. [Module F13](/learn/path-14/module-14-3-option-buyer-vs-seller) works the arithmetic in full. SEBI's Aug 2026 behaviour study, on a random sample of individual traders, shows the same shape in real accounts. In FY26 the traders who mostly sold options had the smallest share of losers of any group, and by a wide margin the largest average loss per trader. ## The common mistake The belief: It is a SEBI registered platform, so it is safe and it makes money. Registration, or an exchange empanelment for an algo provider, says a firm has met conditions to operate. It is not a statement about returns, and the same regulations bar returns claims unless the metrics are verified. A registration number answers the first question and none of the other four. Look the number up, then ask for the verified record. If either is missing, the rest of the pitch does not matter. Watch in the terminal: return or growth per year? A short tutorial on sample data. ## Key takeaways * A level or strike to trade is research work and needs SEBI registration. * Return claims need verified metrics. A screenshot is not a verified record. * Recent prices beside a named contract and a direction are not education. * Referrals, courses and broker links are payments, so free is not free. * Registration and empanelment are about conduct, not about profit. * A far strike wins often by design. Ask about the size of the loss. Two terms to hold on to from 12.8 From the module glossary. Source: Module 12.8, Red flags in F&O: tip groups, too good claims and registration checks. **Before you trade.** Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. [Read the SEBI study](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) What does Red flags in F&O: tip groups, too good claims and registration checks cover?Who is speaking, what is promised, what is attached, who is paid and whether it can be checked, using SEBI's own rules and one dated chain. It works through The idea, plainly, Worked example: a claim against the 10 Jun 2026 chain, The common mistake, Key takeaways. It is module 12.8 of Path 12, Derivatives Basics and Rules, about 7 minutes of reading, free. TTry it ## Risk of ruin, on the same example. Win rate, payoff and size, simulated to the chance of losing the account. Dated NSE end of day data, nothing live, no orders. **Risk of ruin**. [Open the risk of ruin](/learn/tools/risk-of-ruin?preset=high-win-small) AF&O on RupeeCase ## Hedging only, in development F&O at RupeeCase will do one job: protect a portfolio you already own, by a rule published before it runs. No speculation, no naked option selling, no leveraged bets. It is not available yet. [How hedging will work](/hedging)[Sign up for RupeeCase](https://invest.rupeecase.com/signup) [No hedgeFalls with the marketWith a putA floor, for a premiumIllustration with made up numbers, not a product and not a recommendation.](/hedging) QQuick check ## 10 questions, 7 to pass. Each attempt draws 10 of the 15 questions in this module's bank, and a retake draws a fresh set. A pass gives this module's Certificate of Completion. Your result stays on this device and counts towards the Path 12 certificate. 7 of 10 correct passes module 12.8 Every answer is explained when you check; a retake is always free. Source: RupeeCase Learn quiz rules (70% to pass). Passed ### Certificate ID Download PNGPrint or save as PDF[Check the ID](/learn/certificates/verify) Self paced and unproctored. A record of completing free education by RupeeCase; not a NISM certificate and not endorsed by NISM, NSE, BSE or SEBI. It qualifies no one to deal, advise or publish research. CCheck yourself ## Path 12 so far. Your quick check results on this device, stop by stop. Stop 8 of 9 on Path 12 Derivatives Basics and Rules: every live stop, this module ringed. Source: RupeeCase Learn, Path 12. 1. [12.1Why derivatives exist: forwards, futures and options in one storyNot yet](/learn/path-12/module-12-1-why-derivatives-exist) 2. [12.2India's F&O market map: exchanges, clearing, SEBI and who tradesNot yet](/learn/path-12/module-12-2-india-fo-market-map) 3. [12.3Read SEBI's loss studies before your first tradeNot yet](/learn/path-12/module-12-3-sebi-fo-loss-studies) 4. [12.4Contract specs that matter now: lots, expiry days, strikes and settlementNot yet](/learn/path-12/module-12-4-contract-specs-lots-and-expiries) 5. [12.5Margins without jargon: SPAN, exposure, expiry day margin and upfront premiumNot yet](/learn/path-12/module-12-5-fo-margins-explained) 6. [12.6The real cost of a trade: STT, exchange fees, SEBI fee, GST and stamp dutyNot yet](/learn/path-12/module-12-6-cost-of-an-fo-trade) 7. [12.7Position sizing and risk of ruin for F&O beginnersNot yet](/learn/path-12/module-12-7-position-sizing-and-risk-of-ruin) 8. [12.8Red flags in F&O: tip groups, too good claims and registration checksNot yet](/learn/path-12/module-12-8-fo-red-flags#quiz) 9. [12.9Behaviour in F&O: loss chasing and what SEBI's behaviour study foundNot yet](/learn/path-12/module-12-9-fo-trading-behaviour) 10. [TPath test, 30 questionsNot yet](/learn/path-12/module-12-9-fo-trading-behaviour#pathTestSection) Path 12 in reading time: 72 minutes over 9 modules Minutes of reading per module, this one in amber. Source: RupeeCase Learn, Path 12. Explore next ## Put the module to work. * [ToolOption payoff builderLegs on a dated Nifty chain, breakevens and charges](/learn/tools/payoff-builder) * [Free module 12.3Read SEBI's loss studies before your first trade8 min read](/learn/path-12/module-12-3-sebi-fo-loss-studies) * [Free module 12.5Margins without jargon: SPAN, exposure, expiry day margin and upfront premium8 min read](/learn/path-12/module-12-5-fo-margins-explained) * [Free module 14.3Buyer or seller: payoffs, margin, win rate and expectancy9 min read](/learn/path-14/module-14-3-option-buyer-vs-seller) * [Free module 12.7Position sizing and risk of ruin for F&O beginners8 min read](/learn/path-12/module-12-7-position-sizing-and-risk-of-ruin) * [QuestionIs there a "sure shot" option strategy with 90% accuracy?A short answer with a dated chart](/learn/questions/sure-shot-option-strategy) Community ## Join my WhatsApp group. Scan the code, fillFill one short form, and join my WhatsApp group. Slides, sources, factsheets and the rebalance logs live there, and members join a daily Google Meet with me. New to RupeeCase? [Getting started](/getting-started) [See the terminal](/terminal) [Sign up for RupeeCase](https://invest.rupeecase.com/signup) [Join the WhatsApp group](https://forms.gle/C6HMtM1Z2GfeocQV7) [One form, one group](https://forms.gle/C6HMtM1Z2GfeocQV7)Scan with your phone camera SSources ## Go to the source. 12 sources, SEBI the most cited The publisher of each source listed below. Source: Module 12.8 source list. 1. [SEBI circular of 8 May 2026, Norms for sharing and usage of price data for educational purposes](https://www.sebi.gov.in/legal/circulars/may-2026/norms-for-sharing-and-usage-of-price-data-for-educational-purposes_101293.html) SEBI 2. [SEBI, Intermediaries Regulations 2008, as amended to 16 April 2026 (regulations 16A and 16D to 16F)](https://www.sebi.gov.in/legal/regulations/apr-2026/securities-and-exchange-board-of-india-intermediaries-regulations-2008-last-amended-on-april-16-2026-_101073.html) SEBI 3. [SEBI, Research Analysts Regulations 2014, as amended to 10 October 2026](https://www.sebi.gov.in/legal/regulations/oct-2026/securities-and-exchange-board-of-india-research-analysts-regulations-2014-last-amended-on-october-10-2026-_105294.html) SEBI 4. [SEBI, FAQs on association with persons engaged in prohibited activities (circular of 29 January 2025, updated 8 May 2026)](https://www.sebi.gov.in/legal/circulars/jan-2025/details-clarifications-on-provisions-related-to-association-of-persons-regulated-by-the-board-miis-and-their-agents-with-persons-engaged-in-prohibited-activities_91356.html) SEBI 5. [SEBI, ex parte interim order cum show cause notice of 4 December 2025 on advice given under the guise of trading education (prima facie findings, not a final order)](https://www.sebi.gov.in/sebi_data/attachdocs/dec-2025/ORDER_1764842991.pdf) SEBI 6. [SEBI circular of 4 February 2025, Safer participation of retail investors in algorithmic trading](https://www.sebi.gov.in/legal/circulars/feb-2025/safer-participation-of-retail-investors-in-algorithmic-trading_91614.html) SEBI 7. [SEBI, Trading Behaviour of Individual Traders in the Equity Derivatives Segment (FY25 to FY26), August 2026](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-trading-behaviour-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103836.html) SEBI 8. [SEBI, Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26), August 2026 (algo entities)](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) SEBI 9. [SEBI, registered Investment Advisers](https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=13) SEBI 10. [SEBI, registered Research Analysts](https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=14) SEBI 11. [NSE, empanelled algo providers](https://www.nseindia.com/static/trade/empanelled-algo-providers-exchange) NSE 12. [Bailey, D. H., Borwein, J., Lopez de Prado, M. and Zhu, Q. J., Pseudo-Mathematics and Financial Charlatanism: The Effects of Backtest Overfitting on Out-of-Sample Performance, Notices of the American Mathematical Society, 2014](https://doi.org/10.1090/noti1105) Paper GTerms ## 5 terms from this module. Research analystA person registered with SEBI to give research services, which include a level to trade at, a recommendation to buy, sell or hold, and calls to trade. Investment adviserA person registered with SEBI to give personal advice on securities for a fee. Prima facieOn first look at the evidence. An interim SEBI order states prima facie findings, which a final order may confirm or change. PaRRVAA past risk and return verification agency: a rating agency recognised by SEBI to check the risk and return figures that registered persons may claim. Algo entityIn SEBI's data, a trader that placed at least one algorithmic order in the year. It says how orders were sent, not whether the strategy earns. [All 230 terms in the glossary](/learn/glossary) [Question people askIs there a "sure shot" option strategy with 90% accuracy?A short answer with a dated chart](/learn/questions/sure-shot-option-strategy)[Question people askCan option selling give a "daily income"?A short answer with a dated chart](/learn/questions/option-selling-daily-income)[Related module12.3 Read SEBI's loss studies before your first trade8 min, Beginner](/learn/path-12/module-12-3-sebi-fo-loss-studies)[Related module12.5 Margins without jargon: SPAN, exposure, expiry day margin and upfront premium8 min, Beginner](/learn/path-12/module-12-5-fo-margins-explained)[Pillar guideDerivatives and Quant115 modules across paths 12 to 19](/learn/derivatives) Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.