SEBI Study Finds: A study conducted by the Securities and Exchange Board of India (SEBI) has revealed that a significant majority of individual intraday traders in the equity cash segment incur losses. The study found that 7 out of 10 (71%) of these traders experienced net losses in the financial year 2022-23 (FY23).
Key findings of the SEBI study include:
- Loss Rate: 71% of individual intraday traders in the equity cash segment faced net losses in FY23.
- Young Traders: 76% of these loss-making traders were under 30 years old.
- Increased Participation: The number of individuals participating in intraday trading grew by over 300% in FY23 compared to FY19.
- Frequency and Losses: Traders with very frequent trading activity (more than 500 trades per year) experienced an even higher loss rate of 80%.
- Additional Costs: Loss-making traders also incurred significant trading costs, further impacting their overall financial outcomes.
These findings raise concerns about the risks associated with intraday trading, especially for younger and less experienced investors. SEBI emphasizes the need for increased investor education and awareness to ensure that individuals understand the complexities and risks involved in this type of trading.
The study suggests that intraday trading should not be considered a guaranteed path to quick profits, and it requires a thorough understanding of the market, sound risk management strategies, and disciplined trading practices.