A recent study by the Securities and Exchange Board of India (SEBI) found that seven out of 10 intraday traders in the cash segment incurred losses in the financial year ending March 2023 (FY23).

SEBI in a press release on Wednesday (24 July, 2024) also said that 76 percent of these traders were under the age of 30. The proportion of young traders grew to 48 percent in FY23, up from 18 percent in FY19. This case study has been reviewed by academics, brokers, and market experts.

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“A study conducted by SEBI has found that more than 70% (7 out of 10) of individual intraday traders in equity cash segment have incurred losses in FY 2022-23. The study also noted the surge of over 300% in the number of individuals participating in intraday trading in equity cash segment in FY 2022-23 compared to FY 2018-19,” said SEBI in a press release.

The SEBI study analyzed trading patterns during FY19, FY22, and FY23 to see how they changed before and after the pandemic. It focuses on data from individual clients of the top 10 stock brokers, who together make up about 86% of all individual stock traders in FY 2022-23.

Recent data from SEBI reveals some interesting trends about stock trading and they are as follows:

• About one in three people who trade stocks do so within the same day.

• The number of these day traders has skyrocketed by over 300% from 2018-19 to 2022-23.

• In FY 2022-23, the percentage of day traders under 30 years old has increased to 48%, up from 18% in FY 2018-19.

• Unfortunately, 71% of these day traders ended up losing money in 2022-23.

• According to SEBI, the situation is even tougher for those who trade very often – 80% of them experienced losses.

• Younger traders also faced more losses, with 76% of them losing money compared to other age groups.

Also Read: Zerodha Users Can Now Trade Commodities and Equities with a Single Account

• People who lost money typically made more trades than those who made a profit.

• Additionally, traders who lost money spent 57% of their losses on trading fees, while those who made a profit spent only 19% of their gains on fees.

According to SEBI, the study is expected to enhance awareness among individual traders about the risk associated with day trading in the equity cash segment.

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