A recent report by the Securities and Exchange Board of India (SEBI) has revealed a troubling trend in retail intraday equity trading, where 71% of individual traders incurred losses during FY23. This marks an increase from 65% in FY19 and 69% in FY22. The data shows that the frequency of trading is a critical factor, with the proportion of loss-makers climbing to 80% among traders with very frequent activity.
Among traders with an annual intraday turnover exceeding ₹1 crore, 76% ended up with losses, averaging ₹34,977. Profit-makers in this category saw an average profit of ₹89,172, while loss-makers suffered an average loss of ₹74,575.
The study, based on data from the top 10 stock brokers—covering approximately 86% of the individual client base in the equity cash segment—also highlights a dramatic increase in the number of intraday traders, growing from 1.5 million in FY19 to 6.9 million in FY23, a 4.6-fold rise.
Despite the increase in participation, experienced traders did not fare much better, with 54% of those with over three years of experience reporting losses. The study found that the bottom 78% of traders, by turnover, accounted for less than 1% of the total, while the top 6% accounted for more than 90%.
The SEBI report also noted a growing trend among young traders, with those under 30 years old comprising 48% of intraday traders in FY23, up from 18% in FY19. The findings aim to educate traders about the significant risks and costs associated with intraday trading, as loss-makers spent an additional 57% of their trading losses on related costs, compared to 19% for profit-makers.
Source: ET
News Desk
