💼 𝐒𝐡𝐨𝐜𝐤𝐢𝐧𝐠 𝐅&𝐎 𝐋𝐨𝐬𝐬𝐞𝐬: 𝐓𝐢𝐦𝐞 𝐭𝐨 𝐑𝐞𝐞𝐯𝐚𝐥𝐮𝐚𝐭𝐞? 💼

SEBI has revealed some startling data regarding individual traders in the F&O segment. Here's an eye-opening breakdown of the figures:

🔴 𝐊𝐞𝐲 𝐋𝐨𝐬𝐬-𝐌𝐚𝐤𝐞𝐫𝐬 𝐢𝐧 𝐅𝐘𝟐𝟒:

◾ 91.1% of individual traders (approx. 73 lakh) lost money in the F&O segment.

◾ Average net losses were ₹1.20 lakh per person, including transaction costs.

🔴 𝟑 𝐘𝐞𝐚𝐫 𝐒𝐭𝐮𝐝𝐲 (𝐅𝐘𝟐𝟐-𝐅𝐘𝟐𝟒):

◾ 1.13 crore unique traders faced a combined net loss of ₹1.81 lakh cr in F&O.

◾ In FY24 alone, individuals incurred about ₹75,000 cr in net losses.

🔴 𝐏𝐫𝐨𝐟𝐢𝐭 𝐯𝐬 𝐋𝐨𝐬𝐬 𝐏𝐚𝐭𝐭𝐞𝐫𝐧:

◾ More than 1 crore traders (92.8%) lost an average of ₹2 lakh each over 3 year period.

◾ The top 3.5% of loss-makers (about 4 lakh traders) suffered an average loss of ₹28 lakh each.

◾ Only 7.2% of individual F&O traders turned a profit over 3 years.

◾ A mere 1% managed to earn profits exceeding ₹1 lakh after adjusting for transaction costs.

📉 𝐂𝐨𝐦𝐩𝐚𝐫𝐚𝐭𝐢𝐯𝐞 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞:

◾ While individual traders incurred significant losses, Proprietary traders earned ₹33,000 cr and FPIs earned ₹28,000 cr in gross profits in FY24.

◾ Notably, 97% of FPIs and 96% of Proprietary traders' profits came from “Algo entities.”

🛠️ 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 𝐏𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬:

◾ 99.3% of traders engaged in Options trading, while Futures trading saw a drop to 5.9% in FY24 from 10.6% in FY22.

◾ About 60% of traders in Futures experienced net losses, compared to 91.5% in Options.

💸 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧 𝐂𝐨𝐬𝐭𝐬 (𝐅𝐘𝟐𝟐-𝐅𝐘𝟐𝟒):

◾ Individuals faced over ₹50,000 cr in transaction costs from FY22 to FY24.

◾ On average, each trader incurred ₹26,000 in transaction costs in FY24.

📊 𝐃𝐞𝐦𝐨𝐠𝐫𝐚𝐩𝐡𝐢𝐜 𝐓𝐫𝐞𝐧𝐝𝐬:

◾ The share of young traders (under 30) increased from 31% in FY23 to 43% in FY24, with 93% incurring losses.

◾ Over 75% of individual traders reported an annual income of less than ₹5 lakh.

📊 𝐆𝐞𝐨𝐠𝐫𝐚𝐩𝐡𝐢𝐜𝐚𝐥 𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧: 

◾ Over 72% of F&O traders came from B30 cities, with Maharashtra leading at 21.7% of total traders.

🆕 𝐍𝐞𝐰 𝐓𝐫𝐚𝐝𝐞𝐫𝐬:

◾ Nearly half of FY24's F&O traders (42 lakh) were new entrants, with 92.1% facing losses averaging ₹46,000 per person.

🔄 𝐏𝐞𝐫𝐬𝐢𝐬𝐭𝐞𝐧𝐜𝐞 𝐃𝐞𝐬𝐩𝐢𝐭𝐞 𝐋𝐨𝐬𝐬𝐞𝐬:

◾ Over 75% of loss-makers continued trading in F&O, despite experiencing losses in the prior two years.

These figures by SEBI serve as a stark reminder of the risks associated with F&O trading. The allure of potential profits draws many in, but the data reveals a grim reality: trading in F&O can lead to substantial losses for the majority.

If you’re a trader or planning to enter the market, it’s crucial to:

✔️ Understand the risks

✔️ Set realistic expectations

✔️ Stay informed before making decisions

𝐒𝐮𝐜𝐜𝐞𝐬𝐬 𝐢𝐧 𝐭𝐫𝐚𝐝𝐢𝐧𝐠 𝐢𝐬 𝐚𝐛𝐨𝐮𝐭 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 𝐣𝐮𝐬𝐭 𝐦𝐚𝐤𝐢𝐧𝐠 𝐛𝐨𝐥𝐝 𝐦𝐨𝐯𝐞𝐬—𝐢𝐭’𝐬 𝐚𝐛𝐨𝐮𝐭 𝐦𝐚𝐤𝐢𝐧𝐠 𝐬𝐦𝐚𝐫𝐭, 𝐢𝐧𝐟𝐨𝐫𝐦𝐞𝐝 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧𝐬. 💡

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