📊 𝙄𝙣𝙨𝙞𝙜𝙝𝙩𝙨 𝙛𝙧𝙤𝙢 𝙈𝙮 𝙍𝙚𝙘𝙚𝙣𝙩 𝙄𝙏𝙍 𝙁𝙞𝙡𝙞𝙣𝙜: 𝙆𝙚𝙮 𝙏𝙧𝙚𝙣𝙙𝙨 𝙞𝙣 𝙀𝙦𝙪𝙞𝙩𝙮 𝙁&𝙊 𝙏𝙧𝙖𝙙𝙞𝙣𝙜, 𝘽𝙡𝙚𝙚𝙙𝙞𝙣𝙜 𝙧𝙚𝙙!📉

 📊 𝙄𝙣𝙨𝙞𝙜𝙝𝙩𝙨 𝙛𝙧𝙤𝙢 𝙈𝙮 𝙍𝙚𝙘𝙚𝙣𝙩 𝙄𝙏𝙍 𝙁𝙞𝙡𝙞𝙣𝙜: 𝙆𝙚𝙮 𝙏𝙧𝙚𝙣𝙙𝙨 𝙞𝙣 𝙀𝙦𝙪𝙞𝙩𝙮 𝙁&𝙊 𝙏𝙧𝙖𝙙𝙞𝙣𝙜, 𝘽𝙡𝙚𝙚𝙙𝙞𝙣𝙜 𝙧𝙚𝙙!📉

As a CA, one of the most intriguing aspects of my work during this ITR filing season has been observing a significant trend among F&O traders. Nearly every client involved in this segment had one thing in common: 𝙇͟𝙤͟𝙨͟𝙨͟𝙚͟𝙨͟. 📉

Here’s a deeper look into the findings:

🔍 𝗦𝘂𝗿𝗴𝗲 𝗶𝗻 𝗧𝗿𝗮𝗱𝗲𝗿 𝗡𝘂𝗺𝗯𝗲𝗿𝘀: The number of unique individual traders in the equity F&O segment surged from 7.1 lakhs in FY19 to a remarkable 45.2 lakhs in FY22. Active traders make up 88% of this group, with those aged 30-40 leading in participation (39%).

📉 𝗣𝗿𝗲𝗱𝗼𝗺𝗶𝗻𝗮𝗻𝗰𝗲 𝗼𝗳 𝗟𝗼𝘀𝘀𝗲𝘀: Despite the rise in participants, 89% of these traders faced losses, with an average loss of ₹1.1 lakh. Even among active traders, 90% incurred losses averaging ₹1.25 lakh. Remarkably, the losses for these traders were about 15 times greater than the average profits of those who managed to succeed.

👥 𝗗𝗲𝗺𝗼𝗴𝗿𝗮𝗽𝗵𝗶𝗰 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀: Male traders dominate this segment (>80%), while the younger age group (20-30 years) saw a significant increase in participation from 11% in FY19 to 36% in FY22.

💡 𝗣𝗿𝗼𝗳𝗶𝘁 𝗠𝗮𝗸𝗲𝗿𝘀: Only 11% of traders in the equity F&O segment made a profit, with an average profit of ₹1.5 lakhs. The top 1% of profit makers earned nearly 51% of the total net profit.

💸 𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻 𝗖𝗼𝘀𝘁𝘀: Loss makers spent an additional 28% of their losses on transaction costs, reflecting frequent trading. Even profit makers incurred up to 50% of their profits in transaction costs.

The trends highlight the importance of strategic planning and risk management in trading. For those engaged in this segment, understanding these dynamics is crucial for navigating the complexities of equity F&O trading effectively.

This analysis sheds light on the harsh reality of F&O trading, where the odds seem to be stacked against the average trader. It’s a stark reminder to approach the market with caution and a well-thought-out strategy. The allure of high returns often overshadows the inherent risks.

📊 While the excitement of the market is undeniable, a cautious approach, thorough research, and a clear understanding of potential pitfalls are essential.

Let this be a reminder to all budding traders: The market is as unforgiving as it is enticing. Stay informed, tread carefully, and always be prepared for the unexpected. 💡

📊 𝘈𝘴 𝘢 𝘊𝘈, 𝘸𝘪𝘵𝘯𝘦𝘴𝘴𝘪𝘯𝘨 𝘵𝘩𝘦𝘴𝘦 𝘵𝘳𝘦𝘯𝘥𝘴 𝘩𝘢𝘴 𝘣𝘦𝘦𝘯 𝘣𝘰𝘵𝘩 𝘦𝘯𝘭𝘪𝘨𝘩𝘵𝘦𝘯𝘪𝘯𝘨 𝘢𝘯𝘥 𝘤𝘰𝘯𝘤𝘦𝘳𝘯𝘪𝘯𝘨. 𝘐𝘵’𝘴 𝘢 𝘱𝘰𝘸𝘦𝘳𝘧𝘶𝘭 𝘭𝘦𝘴𝘴𝘰𝘯 𝘪𝘯 𝘵𝘩𝘦 𝘪𝘮𝘱𝘰𝘳𝘵𝘢𝘯𝘤𝘦 𝘰𝘧 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘭𝘪𝘵𝘦𝘳𝘢𝘤𝘺 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘯𝘦𝘦𝘥 𝘧𝘰𝘳 𝘴𝘰𝘶𝘯𝘥 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘴𝘵𝘳𝘢𝘵𝘦𝘨𝘪𝘦𝘴.

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