A recent study by the Securities and Exchange Board of India (SEBI) has found that 93 percent of individual traders in the equity futures and options (F&O) segment incurred significant losses between FY22 and FY24. Over this three-year period, the total losses amounted to more than ₹1.8 lakh crore, with the average individual trader losing around ₹2 lakh, including transaction costs.
The top 3.5 percent of loss-making traders, approximately 4 lakh individuals, faced much steeper losses, averaging ₹28 lakh per trader. In contrast, only 1 percent of traders managed to earn profits exceeding ₹1 lakh, adjusted for transaction costs.
SEBI’s study highlighted an alarming tendency as the findings follow a similar report from January 2023 when 89% of individual traders reportedly suffered losses in FY22 alone.
As local traders started to struggle, proprietary traders, and FPIs moved to the forefront. Proprietary traders made ₹33,000 crore, and FPIs earned ₹28,000 crore in FY24, before accounting for the cost of the transaction, buoyed in large measure by algo-trading.
The study had also quoted that despite losses, individual traders continued to invest heavily in F&O transaction costs. On an average, a person spent ₹ 26,000 in FY24. Aggregating these for three years, the costs worked out to ₹ 50,000 crore with brokerage and exchange fees comprising 71 per cent of the total. Moreover, the SEBI report mentioned that 75 percent of individual traders who incurred losses continued to trade, even after suffering continuous losses for many consecutive years.
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Source: Moneycontrol
News Desk
