Psychological Traits in Option Trading Decisions within the SDG Framework

Linni Wilson and E Shirley Elizabeth

The Review of Finance and Banking, 2025, vol. 17, issue 1, 55-70

Abstract: This study explores the intersection of behavioural finance and sustainability within the context of options trading, focusing on how psychological traits influence decision-making in alignment with the Sustainable Development Goals (SDGs). The primary objectives are to investigate the mediating role of sustainable investment practices in the relationship between psychological traits and trading performance and to assess the moderating effect of market volatility on the relationship between psychological traits and sustainable practices. Primary data were collected from 300 options traders in Kerala using a stratified random sampling method. Structural Equation Modelling (SEM) was employed to analyse the complex interrelationships among the key variables. While the findings provide valuable insights for option traders, financial institutions, and policymakers seeking to embed sustainable practices in trading behaviour, the study is limited in its generalizability. The conclusions are based on data from a specific regional context—retail option traders in Kerala—where factors such as financial literacy and educational access may differ from those in other populations. Therefore, caution should be exercised when extending these results to broader or more diverse trading communities. This study highlights the need for region-specific educational and regulatory interventions and encourages future research to validate the model across different demographics and market environments.

Date: 2025
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