70 pc of investors burnt money in intraday trading
By : RAVI RANJAN PRASAD
Update: 2024-07-25 06:12 GMT
Mumbai: A study conducted by Securities and Exchange Board of India (Sebi) has found that more than 70 per cent (7 out of 10) of individual intraday traders in equity cash segment have incurred losses in FY 2022-23. The study also noted the surge of over 300 per cent in the number of individuals participating in intraday trading in equity cash segment in FY 2022-23 compared to FY 2018-19.
"The study is expected to enhance awareness among individual traders about the risks involved in intraday trading in equity cash segment," Sebi said.
Young traders entered intraday trading after the pandemic as their participation rose sharply.
"One in three individuals who trade in equity cash segment, trades intraday. Share of young intraday traders (age less than 30 years) has grown to 48 per cent in FY 2022-23 as compared to 18 per cent in FY 2018-19. 7 out of 10 individual intraday traders (71 per cent) in equity cash segment incurred net loss in FY 2022-23.Proportion of loss-makers increased to 80 per cent for traders with very frequent (more than 500 trades in a year) trading activity."
"The percentage of loss-makers among younger traders (age less than 30 years) was higher (76 per cent in FY 2022-23) as compared to other age groups. Average number of trades by loss-makers was higher than the profit-makers. Over and above the trading losses incurred, loss makers expended an additional 57 per cent of their trading losses as trading costs in FY 2022-23; Profit makers spent 19 per cent of their trading profits as trading costs in FY 2022-23," the study found.
"71 per cent of the individual traders incurred losses, with an average loss of Rs. 5,371 during FY23. Whereas, 29 per cent of the individual traders made profits, with the average profit by profit-makers being Rs 5,989 during FY23."
"During FY23, 76 per cent of individual traders with annual intraday turnover more than Rs 1 crore, were loss-makers with an average loss Rs 34,977 during FY23."
The study covers the periods of FY 2018-19,FY 2021-22 and FY 2022-23, in order to comparatively analyse the trends before and after the pandemic, Sebi said.
The study is based on a sample of individual clients of the top-10 stock brokers, accounting for around 86 per cent of the individual client count in the equity cash segment during FY 2022-23, Sebi said.
Participation from Tier-1, Tier-2, Tier-3 cities increased to 3 times, 5 times, 10 times, respectively, in FY23 as compared to FY19,the study found.
"The study is expected to enhance awareness among individual traders about the risks involved in intraday trading in equity cash segment," Sebi said.
Young traders entered intraday trading after the pandemic as their participation rose sharply.
"One in three individuals who trade in equity cash segment, trades intraday. Share of young intraday traders (age less than 30 years) has grown to 48 per cent in FY 2022-23 as compared to 18 per cent in FY 2018-19. 7 out of 10 individual intraday traders (71 per cent) in equity cash segment incurred net loss in FY 2022-23.Proportion of loss-makers increased to 80 per cent for traders with very frequent (more than 500 trades in a year) trading activity."
"The percentage of loss-makers among younger traders (age less than 30 years) was higher (76 per cent in FY 2022-23) as compared to other age groups. Average number of trades by loss-makers was higher than the profit-makers. Over and above the trading losses incurred, loss makers expended an additional 57 per cent of their trading losses as trading costs in FY 2022-23; Profit makers spent 19 per cent of their trading profits as trading costs in FY 2022-23," the study found.
"71 per cent of the individual traders incurred losses, with an average loss of Rs. 5,371 during FY23. Whereas, 29 per cent of the individual traders made profits, with the average profit by profit-makers being Rs 5,989 during FY23."
"During FY23, 76 per cent of individual traders with annual intraday turnover more than Rs 1 crore, were loss-makers with an average loss Rs 34,977 during FY23."
The study covers the periods of FY 2018-19,FY 2021-22 and FY 2022-23, in order to comparatively analyse the trends before and after the pandemic, Sebi said.
The study is based on a sample of individual clients of the top-10 stock brokers, accounting for around 86 per cent of the individual client count in the equity cash segment during FY 2022-23, Sebi said.
Participation from Tier-1, Tier-2, Tier-3 cities increased to 3 times, 5 times, 10 times, respectively, in FY23 as compared to FY19,the study found.