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Securities and Exchange Board of India

Press Releases No. 02/2023

Under the supervision of a working group, SEBI has conducted a study analysing the trends in both participation and in profits and losses of individual traders in the equity F&O segment. The working group had representation from academia, clearing corporations, brokers, and market experts.

To compare results in a contextual manner before and after the pandemic, the study covers the periods of FY 2018-19 and FY 2021-22. The study is based on a sample of all individual clients of all the top-10 stock brokers, accounting for 67% of the overall individual client turnover in the equity F&O segment during FY 2021-22.

Some of the major findings of the study are as under:

  • There has been a significant increase of over 500% in the number of individual traders in the equity F&O segment in FY 2021-22, as compared to FY 2018-19.
  • 98% of individual traders in the equity F&O segment traded in options during FY 2021-22.
  • 9 out of 10 individual traders in the equity F&O segment incurred net losses during both the years FY 2018-19 and FY 2021-22.
  • On average, loss makers registered net trading loss close to ₹ 50,000 in FY 2021-22. The average absolute net loss of a loss maker was over 15 times the net profit made by a profit maker.*
  • Over and above the net trading losses incurred, loss makers expended an additional 28%* of net trading losses as transaction costs.
  • Those making net trading profits incurred between 15% to 50%* of such profits as transaction cost.

SEBI believes that periodic data analysis and disclosure of this nature can significantly enhance investor awareness around market risks. With this in mind, SEBI will shortly issue guidelines in respect of additional risk disclosures required to be made by brokers and exchanges to investors.

The study is available on SEBI website www.sebi.gov.in.

* for active traders excluding outliers

Mumbai

January 25, 2023

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One Comment

  1. Sujit Kumar Das says:

    Dear The Editor..
    We the Indian means the majority of the mass want a fair India Business Platform. Fair competition is expected by the Majority but the system basically controlled by them means a smaller powerful group, that results the pointed out loss of 9 people out of 10. Yes that is the hard truth.. If the SEBI authority and the so called market expert are there in the analysis, they must be mandated by the govt. to find out the data of the distant past too. Yes Mr. Editor, please tell us, is not the F&O one type of gambling. For whose favour is this kept under the Act / rules? Or are we simply following the westerns systems? The one thing all we use to say, market will speak the last word no one else. In this situation too we will have the opportunity to do gambling / satta like matters. See, after seeing the Hindenberg report SEBI moves their body.. Yes it’s possible in our country… but time will come and Our India will show the path to all the World… Hope for the best…

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