Informist, Monday, Sep 23, 2024

--SEBI study: 7.3 mln individual F&O traders lost money FY24

--SEBI: 91.1% of individual F&O traders lost money FY24

--SEBI releases study analysing equity F&O profit, loss FY22-24

MUMBAI – The Securities and Exchange Board of India today released a study paper which claimed that around 7.3 mln out of the analysed universe of 8.62 mln traders lost 120,000 rupees per person on an average in the equity derivatives segment in 2023-24 (Apr-Mar). The 8.62 mln trader sample covered futures and options clients of top 15 brokerages.

According to the SEBI study, the quantum of individual traders incurring a loss in F&O trading stood at 91.1%. In the study, SEBI factored in transaction costs, including taxes, while determining the loss. Without these costs and taxes, only 85.1% of individual traders made losses in FY24, SEBI said in the report.

The 120,000-rupee-average loss in 2023-24 was 16.1% lower than that in the previous financial year.

While individual traders and others made a loss of 610 bln rupees, excluding transaction costs, in the derivatives segment, the foreign portfolio investors earned about 330 bln rupees and proprietary traders earned 280 bln rupees of gross profits in 2023-24, the regulator said in a press release.

SEBI said about 97% of profits for FPIs and 96% of profits for proprietary traders came from FPIs or proprietary traders who did at least one trade in a year using algorithmic orders.

About 4.2 mln traders traded for the first time in three years in the equity derivatives segment in 2023-24, the regulator said. SEBI said 92.1% of the new traders experienced an average net loss of about 46,000 rupees per person in 2023-24.

In 2023-24, about 91.5% of traders made a net loss in options, compared with 60% in futures. SEBI said while individual traders, including Hindu undivided families, proprietorship firms, partnership firms, and limited liability partnership firms, made a loss of 550 bln rupees in the options segment, they made profits of about 134 bln rupees in the futures segment in 2023-24. The share of F&O traders, who traded in futures at least once a year, has come down to 5.9% in 2023-24 from 10.6% in 2021-22, SEBI said.

The top 3.5% of the loss-making traders, or about 400,000 traders, made an average loss of 2.8 mln rupees per person, including the transaction costs, between 2021-22 (Apr-Mar) and 2023-24. Despite making losses in the previous two years, over 75% of the loss-making traders continued trading in the F&O segment, the regulator said. About 7.2% of the individual F&O traders made a profit between 2021-22 and 2023-24.

About 81% of the total losses in the options segment were incurred by high value traders, while 18.4% was incurred by mid-size traders, and 0.6% by small-size traders, SEBI said. High-value traders are traders that have a combined premium turnover of more than 10 mln rupees in options between 2021-22 and 2023-24. Mid-sized traders have a combined turnover between 100,000 rupees and 10 mln rupees, and small-sized traders have a combined turnover of less than 100,000 rupees. On average, individual traders spent 26,000 rupees per person on F&O transaction costs in 2023-24, SEBI said, adding that about 71% of the transaction cost was in the form of brokerage and exchange fees. End

Reported by Aman Aryan

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.