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93% Of Individual Traders Lose Big In Equity F&O Segment: SEBI Study

The study highlights that the young traders below 30 have increased from 31% to 43% in 2023-24 FY and 75% of loss-making traders continued despite consecutive losses.

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93% Of Individual Traders Lose Big In Equity F&O Segment: SEBI Study

93% of individual traders incurred losses in equity F&O during FY22-FY24 (Image:SEBI)

A recent study by the Securities and Exchange Board of India (SEBI) revealed alarming losses for individual traders on Monday in the equity futures and options segment, in which the individual traders lost a staggering Rs 1.8 lakh crore from April 2021 to March 2024. It was said that only 7.2% of individual traders made a profit with just 1% earning over Rs 1 lakh after costs, meanwhile, 93% of individual investors lost an average of Rs 2 lakh. In contrast, proprietary traders and Foreign Portfolio Investors made profits of Rs 33,000 crore and Rs 28,000 crore, respectively, in 2023-24.

“93 per cent of over 1 crore individual Futures and Options (F&O) traders incurred average losses of around Rs 2 lakh per trader during the three years from FY22 to FY24, inclusive of transaction costs,” SEBI stated.

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The study highlights that the young traders below 30 have increased from 31% to 43% in 2023-24 FY and 75% of loss-making traders continued despite consecutive losses. Individuals from Beyond Top 30 (B30) cities have made up over 72% of the overall F&O trader base which is a higher proportion compared to mutual fund investors and at least 62% of the investors are from the B30 cities. Individuals over 75% of F&O traders in FY24 had proclaimed an annual income of less than 5 lakh. As per SEBI, the entity has come out consultation paper pondering to overcome volatility in the F&O space in July.

The study also revealed that individual traders incurred substantial expenses on (F&O) transactions. In FY24 the average cost per trader was Rs 26,000. Collective transaction costs totalled Rs 50,000 crore over the three years from FY22 to FY24, Also, brokerage fees accounted for 51% (Rs 25,500 crore), while exchange fees comprised 20% (Rs 10,000 crore) of these costs. 

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Topics
F&O Segment Individual Traders SEBI

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