Nearly 93% of individual traders incurred losses in F&O between FY22 and FY24: SEBI study

“During FY22-FY24, 1.13 crore unsocial idiosyncratic traders (in F&O segment) incurred a combined nett nonaccomplishment (i.e. trading nonaccomplishment inclusive of transaction costs) of Rs 1.81 lakh crore successful F&O,” the SEBI survey said.

In FY24 alone, individuals incurred astir Rs 75,000 crore successful nett losses.

More than 1 crore loss-making traders (92.8 per cent of idiosyncratic traders) lost, connected an average, astir Rs 2 lakh per idiosyncratic successful the F&O implicit the play of 3 years.

Top 3.5 per cent of loss-makers, oregon astir 4 lakh traders, faced an mean nonaccomplishment of Rs 28 lakh per idiosyncratic successful the 3 years, inclusive of transaction costs.

The survey showed that conscionable 7.2 per cent of idiosyncratic F&O traders made a nett implicit the play of 3 years, and lone 1 per cent managed to gain profits implicit Rs 1 lakh, aft adjusting for transaction costs.

F&O are derivative instruments wherever traders bargain an underlying plus (share) astatine a predetermined price. Trading successful F&O has been a interest arsenic galore retail investors person mislaid their hard-earned money.

In July this year, SEBI, successful a consultation paper, projected a bid of short-term measures to curb speculative trading successful scale derivatives, including restricting aggregate enactment declaration expires, raising the size of options contracts and intraday monitoring of presumption limits.

SEBI’s caller survey said that astir fractional of each the F&O traders successful FY24 (42 lakh traders) were “New Traders” (i.e. traders who traded for the archetypal clip successful 3 years successful the equity F&O segment). Around 92.1 per cent of these “New Traders” experienced losses and connected an average. They incurred a nett nonaccomplishment of astir Rs 46,000 per idiosyncratic successful FY24.

Despite consecutive years of losses, much than 75 per cent of loss-making traders continued trading successful F&O.

As per the findings of the study, the proprietary traders earned astir Rs 33,000 crore of gross profits (i.e. trading profits earlier accounting for transaction costs) successful F&O conception successful FY24, followed by FPIs who earned astir Rs 28,000 crore successful gross profits.

Against this, individuals and others incurred a nonaccomplishment of implicit Rs 61,000 crore successful FY24 (before accounting for transaction costs).

“Majority of profits for FPIs and proprietary traders were made by “Algo entities”. Close to 97 per cent profits of FPIs and 96 per cent profits of proprietary traders came from Algo entities successful FY24,” the survey showed.

Algo entities are considered arsenic those entities, who person done astatine slightest 1 commercialized successful a twelvemonth utilizing algorithmic order.

The proportionality of young traders (having property little than 30 years) trading successful F&O has accrued importantly from 31 per cent successful FY23 to 43 per cent successful FY24.

Close to 93 per cent of these young traders incurred losses successful F&O successful FY24, higher than the mean nonaccomplishment makers of 91.1 per cent successful FY24. Over 75 per cent of idiosyncratic F&O traders (65.4 lakh traders) successful FY24 had declared yearly income of little than Rs 5 lakh.

The survey showed that the proportionality of ‘Female’ traders participating successful F&O has decreased from 14.9 per cent successful FY22 to 13.7 per cent successful FY24. Compared to ‘Male’ traders, little proportionality of ‘Female’ traders incurred losses.

While 91.9 per cent ‘Male’ traders made losses successful F&O successful FY24, 86.3 per cent percent of ‘Female’ traders made losses successful F&O.