F&O Trading: Four In 10 Traders Under 30, Half Of Them From Four States, SEBI Study Reveals

Four out of 10 traders in the futures and options segment were aged below 30 and more than half among all the F&O traders during the fiscal 2023-24 belonged to just four states—Maharashtra, Rajasthan, Gujarat and Uttar Pradesh, according to the findings of a study released by the SEBI on Monday.

Among them, 18.8 lakh or 21.7% of the overall F&O traders are based in Maharashtra, 10.1 lakh or 11.6% in Gujarat, 9.3 lakh or 10.7% in Uttar Pradesh, and 5.4 lakh or 6.2% in Rajasthan.

That comes as SEBI revealed that the proportion of F&O traders aged under 30 has increased to 43% in the previous financial year, from 31% in the financial year ending March 2022-23.

Nearly 93% of these young traders incurred losses in F&O in fiscal 2024, the study added.

F&O continues to attract market participants who have a low annual income, the study suggests.

The proportion of 'low income traders,' or those having annual income of less than Rs 5 lakh has increased to 76% in the previous fiscal from 71% in the preceding fiscal," it added.

Besides, the proportion of female traders participating in F&O has decreased from 14.9% in fiscal 2022 to 13.7% in the fiscal 2024, the study revealed.

Compared to male traders, a lesser proportion of female traders incurred losses, it pointed out. "While 91.9% male traders made losses in F&O in fiscal 2024, 86.3% percentage of female traders made losses in F&O".

The study further revealed that individuals from Beyond Top 30 (B30) cities made up over 72% of the total F&O trader base. In comparison 62% of mutual fund investors are from B30 cities, it said. "For every 100 mutual fund investors, there were 28.6 F&O traders from B30 cities."

On an average, individual traders spent Rs 26,000 per person on F&O transaction costs during the last fiscal, the study revealed.

Over the three-year period ending March 2024, individuals collectively spent about Rs 50,000 crore on transaction costs, with 51% of these costs being brokerage fees and 20% being exchange fees, it added.

During this period, nine out of 10 individual traders experienced losses in F&O trading. The total losses amounted to more than Rs.1.8 lakh crore.

The study found that individual traders incurred average losses of around Rs 2 lakh each, including transaction costs. The top 3.5% of loss-makers, about 4 lakh traders, faced average losses of Rs 28 lakh each.