89% Traders Lose Money in F&O in India – SEBI Study (2022-23)

SEBI has released a detailed study of the Individual traders’ analysis of Profit and Loss in Equity Futures & Options (F&O). The result are not surprising as we all know that very few traders genuinely make any money. A whopping 89% Traders in India loe money in trading F&O segment. But it is good to see the regulator educating the common mans about the dangers of trading.

The period of the study is FY19 to FY22. You can access the study here on SEBI website. Few highlights from the study –

  • SEBI report on individual F&O trade clearly shows 89% of traders making losses!
  • Only 11% of individual traders actually make money. Just 11%. And even if you are somehow part of the elite 11%, the average profits are only Rs 1.5 lakh! That too for the entire one year period.
  • Among active traders, almost 90% of the active traders incurred average losses of Rs 1.25 lakh during F22. The average profit made by them went up to Rs. 1.9 lakh during the same period.

Here are few tables to further prove that most traders never make money.

After SEBI’s report, it is quite clear that the odds of making money through trading for individuals are every low. Do you now need more reasons to get your hand dirty in F&O?

Doing it with small amounts, for fun, is fine. But be very careful about planning to become full time traders. This is no joke. I know a few traders who earn quite well from trading. But most traders lose money over a period of time. They may not realize it. They may not accept it. But that is a fact.

And do you know what the problem would be – All those in the 89% loss-making trader’s category will think that they are just one trade away from entering the profitable 11% club. But that is not going to happen to, once again, 89% of them.

So when it comes to trading, remember that the odds are stacked against you. As a common investor, who has other things to plan and worry for in life, its best to stick to planning your investments with SIP in mutual funds. That is your best bet.

But kudos to the regulator SEBI for genuinely trying to remove ignorance among wannabe traders and sending the warning.

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