Seven out of 10 intraday traders in equity cash segment made losses: Sebi study

A study conducted by capital markets regulator Sebi has revealed that more than 70 per cent (seven out of 10) of individual intraday traders in the equity cash segment have incurred losses in the financial year 2022-23 (FY23). 

The study, released on Wednesday, also noted the surge of over 300 per cent in the number of individuals participating in intraday trading in the equity cash segment in FY23 compared to FY 2018-19 (FY19).

Sebi said it conducted this study analysing the trends of profits and losses in intraday trading by individuals in the equity cash segment. And, this study has been peer-reviewed by a working group with representation from academia, brokers and market experts.

Around one in three individuals who trade in equity cash segment, trades intraday, it also stated. The hare of young intraday traders (age less than 30 years) has grown to 48 per cent in FY23 compared to 18 per cent in FY19.

"Proportion of loss-makers increased to 80 per cent for traders with a 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 FY23) when compared to other age groups. The average number of trades by loss-makers was higher than the profit-makers," the study also pointed out.

"Over and above the trading losses incurred, loss makers expended an additional 57 per cent of their trading losses as trading costs in FY23. Profit makers spent 19 per cent of their trading profits as trading costs in FY23," it further said.

The Securities and Exchange Board of India's study covered FY19, FY22 and FY23 periods, in order to analyse the trends before and after the pandemic. Sebi also mentioned that 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 FY23.