Same pinch. Same pinch. 
…or they should not be in this specific market holding that specific financial instrument right now.
I do not see any contradiction / irony in this.
For the scenario described in the above comment,
there are better suited financial instruments
- less volatility
- less risk
- less time required to be spent learning, understanding, staying abreast of the evolving financial markets
that are ideal for folks who are primarily not in the financial markets due to their familiarity/expertise with it,
but solely to avoid missing out on any potential upsides.
Disincentivizing such participation, and encouraging such folks to opt for alternatives requiring less of their time spent exploring and deploying financial instruments and more on the other activities that they have expertise in sounds prudent.
(Note that we are not talking about the folks here whose)
I cannot prove this beyond any reasonable doubt, no.
But here’s what i believe -
Even with the current volume of unsophisticated retail participants,
a trend can be established using coordinated channels of traditional/social media,
using these unsophisticated retail participants as the front,
and that is often enough to trigger the rest of the financial machinery
to participate in the trend to go along with it and make a quick buck.
I think it would help to remove easily manipulated retail individuals from the equation
that are ending-up being puppets for the large entities manipulating the market with a lot of middle-men involved on traditional media and social-media.
Once this is done, then the regulators tightening the noose around the large market manipulators a.k.a. the “smart money”, does not run the risk of the “smart money” attempting one last big push to YOLO all the risk onto the unsuspecting puppet retail individuals in the market, leaving them holding the bag of duds in the long-term.
I see the current move by the regulator to forcefully eliminate the unsuspecting retail individuals from a certain part of the market, as accidentally revealing their hand.
I fully expect an imminent set of regulations that would force the institutional investors to take drastic measures, including trying to dump all their risk onto any individual investors they find, which if this regulation goes well, they should not find any, when the time comes. 
Of course, with this path chosen, and regulations proposed, this scenario might not happen now. Hopefully, Just the threat of this eventuality, with a lack of an easy escape hatch (no easy access to “dumb money” to to dump upon and run away), might force the institutional investors to mend their ways and adopt lesser risk. Disaster averted. Maybe, we will be reading about it in someone’s autobiography 2 decades from now, after they have retired, that how close we came in 2025, to the Indian Rupee becoming the next Zimbabwean Dollar, or the Argetine Peso.
it will be interesting to find out how much of the retail participation volume in derivatives was to address this aspect vs. retail participation in derivatives without using it as a hedge to de-risk one’s holdings.
a. Not having derivatives (or costlier derivatives due to less liquidity) is a cost, yes.
b. But, is this cost higher than the costs borne due to “dumb money” speculating in derivatives.
If not, then it is a good trade-off (in aggregate), right?
Of course the individual folks bearing the costs in the 2 scenarios are likely different,
hence the reference to the trolley-problem earlier in this topic-thread.
Especially considering that there are other alternative financial instruments that an individual retail investor could use to obtain similar exposure (sure, almost no 2 financial instruments are identical) to potential upside and limit their downside?
Thoughts?
Absolutely.
I don’t know for sure that they are doing nothing for the “remaining 70%”.
Are you sure about that? 
@Meher_Smaran would you consider a request to explore and post more updates that affect “smart money” / institutional investors. It would definitely help improve the outlook/mindset of us folks on TradingQnA who are currently always caught-up looking at half the picture and crying “Oh woe is me!”
( PS: We promise to share such posts with our institutional investor friends and make them as smart as we are 
.
Sorry couldn’t resist. 
)
Isn’t that 1% too high a number already?
Remember, in this context, we are currently talking about
someone who does nothing else but research markets and trade.
(not invest. not as a side-gig)
In my opinion. if we think of any other specific profession that requires
- literacy
- moderate to high training / specialized-education
- to understand the sophisticated specifics in the domain
- full-time dedication of focus/time
- to monitor markets while they are open
- and research the market while they are closed
- and significant assets/capital/cash-flow
…i think we would be hard-pressed
to find something that can be justified
to dedicate 1% of a nation’s population towards
that too with the current level of low barrier to entry associated with active trading.
In light of this, having a simple periodic test with a score, or a credit-rating check with a reasonable threshold to pass, and if one fails, then being required to engage in less riskier financial instruments until one builds-up the necessary score/rating and is then allowed to retry in the riskier instruments in the near future, starts to sounds very reasonable. No?
Sure. This makes sense too.
Broad-based regulations are usually optimal for the majority in aggregate.
There almost always being multiple possible tweaks,
being different and contradicting tweaks for various individuals,
that would lead to a slightly better outcome for each individual respectively.
