F&O Trading: Four In 10 Traders Under 30, Half Of Them From Four States, SEBI Study Reveals
The proportion of 'low income' F&O traders, or those having annual income of less than Rs 5 lakh, stood at 76% in fiscal 2024, SEBI's study showed.
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.
'Low Income' Traders Up
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."
Transaction Costs
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.
