One In Four Market Participants Are Intraday Traders With Most Accounts Bleeding

More than a fourth, or about 27%, of market participants in India's $5.37-trillion stock market are intraday traders, with seven in 10 traders incurring losses, the latest study by the market regulator showed.

Multiple agencies' have flagged the booming activity in India's derivates segment. The Securities and Exchange Board of India highlights that individuals participating in intraday trading in the equity segment surged 300% in the financial year 2023 as compared to fiscal 2019.

India's chief economic advisor recently warned that the savings of retail investors must be made productive amid a boom in derivate trading, especially expiration-day trading.

Higher the age, lower the loss incurred by traders in Asia's fifth-largest stock market, SEBI said in its latest study on July 24. Intraday traders under 30 had the highest percentage of loss-makers in fiscal 2023.

In the financial year 2023, the loss-makers exacerbated their trading losses by 57% due to trading costs, SEBI said. Adding to this, the government has now increased the securities transaction tax along with the long- and short-term capital gains tax in its Union Budget for the fiscal.

"Will traders withdraw or reduce trades because the costs have increased? In my opinion, it is a formal no," market veteran CK Narayan told NDTV Profit.

Very small traders with less than Rs 5,000 average trade size dominated the market with about 47% share, and small traders with Rs 5,000 to Rs 25,000 trade size were at 26.4%.

The study reveals that female investors were more prudent in trading than their male counterparts. The proportion of profit-makers among a group of female traders was higher, while the 'married' traders’ group had a higher proportion of profit-makers than the ‘single'.