We analyze a market-wide panel dataset on retail option trading from India, which has an 80% share in option contracts traded worldwide. Retail participation is concentrated in and dominates index options trading. Traders exhibit short-term speculative behavior with significant day trading, short-duration directional bets, especially as options converge to 0DTE, and make significant losses. Three natural experiments show that financial constraints and lottery-like preferences shape investor behavior. An exogenous increase in the supply of short-maturity options induces trading. Lot-size increases and delivery margins trying to curb speculation are offset by speculative shifts to small ticket-size, riskier options. While stock market participation increases welfare in canonical household finance models, it can also entrench speculative behavior that is difficult to undo.

We study digital platforms’ transmission of financial knowledge and their effects on
users’ investment in stocks and performance. Leveraging a proprietary dataset from one
of China’s largest digital platforms, we measure users’ acquisition of financial knowledge
through various platform information channels. Using a quasi-experiment setting to instrumentalize
the acquisition, we find that the acquisition substantially increases stock
market participation and enhances investment behaviors’ sophistication and performance,
especially for older, inexperienced, and less wealthy households. Thus, digitalization democratizes
finance by providing low-cost and scalable financial education, empowering
individuals to make investment decisions aligned with portfolio theory

Despite the rise of financial apps and digital platforms, millions of people still struggle to save, budget, and make informed financial decisions. Why? Because money isn't just math - it's emotion, habit, and human bias. This panel explores the powerful intersection of behavioral economics and modern banking technology, drawing on insights from researchers and real-world innovations in digital finance.

Bringing together banking technologists and behavioral scientists, we’ll dive into the psychological barriers to good financial behavior - from procrastination and present bias to overconfidence and friction. We’ll examine how banks can ethically use nudges, gamification, personalization, and behavioral design to help consumers spend more mindfully, save more consistently, and make financial decisions that support long-term well-being.