In a startling revelation on futures & options (F&O) trading, a survey by capital market regulator SEBI suggests that every 9 out of 10 traders suffered losses in the last financial year, 2023-24. Individuals incurred about Rs 75,000 crore in net losses during the entire fiscal.

According to SEBI, 91.1% of individual traders – about 73 lakh traders – lost money in the F&O segment in FY 2023-24, with their average net loss (inclusive of transaction costs) at Rs 1.2 lakh per person.

F&O Trading: 1.13 crore traders lose Rs 1.81 lakh crore during FY22-24

Over the duration of fiscal years, FY 2022-2024, as many as 1.13 crore unique individual traders incurred a combined net loss (i.e. trading loss inclusive of transaction costs) of Rs 1.81 lakh crore in F&O deals.

SEBI survey data also revealed that more than 1 crore loss-making traders or 92.8% of individual traders, lost on an average about Rs 2 lakh per person in the F&O over the period of three years, FY 2022-24.

Top 3.5% loss-makers suffer average loss of Rs 28 lakh per person

Around 4 lakh loss-making traders, which comes to about top 3.5% of overall loss-makers, suffered an average loss of Rs 28 lakh per person over the same period, inclusive of transaction costs.

Also read: Lottery-like taxation: Fear grips F&O traders as 30% tax likely on transactions

What is the percentage of F&O traders booked profit over FY22-24?

Only 7.2% of individual F&O traders made a profit over the period of three years, as per SEBI data. More surprisingly, only 1% of individual traders managed to earn profits exceeding Rs 1 lakh, after adjusting for transaction cost.

Transaction costs for individual traders:

On an average, individual traders spent Rs 26,000 per person on F&O transaction costs in FY24, the survey reveals. Over the three-year period from FY22 to FY24, individuals cumulatively spent around Rs 50,000 crore on transaction costs, with 51% of these costs being brokerage fees and 20% being exchange fees.

Of late, the market watchdog, SEBI, has taken a strong note of rising retail participation in the F&O trading, necessitating some strong measures from the regulator to curb this frenzy.

Increasing participation of young and B30 city traders:

The proportion of young traders (below 30 years) in the F&O segment rose from 31% in FY23 to 43% in FY24, the survey reveals. Individuals from Beyond Top 30 (B30) cities made up over 72% of the total F&O trader base, a higher proportion compared to mutual fund investors, 62% of whom are from B30 cities.