Nine Out Of 10 Individual F&O Traders Lost Money In FY22

89% individual traders suffered an average loss of Rs 1.1 lakh in FY22. In comparison, 11% made a profit of Rs 1.5 lakh.

<div class="paragraphs"><p>(Source: Reuters)</p></div>
(Source: Reuters)

You may have heard it. The regulator has found it to be true. Trading in F&O is largely a losing game. Nine out of 10 individual traders in the futures and option market ended up losing money in the fiscal ended March 2022. What's more, most of them were young and first-timers.

Nearly 90% of individual F&O investors suffered losses in FY22, according to a study by the Securities and Exchange Board of India.

That's when the number of such investors participating in the F&O market spiked 500% from FY19 to FY22, according to the report. The period of study was suitably selected keeping in view the influx of retail investors in the last three years to analyse the trends before and after Covid-19, SEBI said.

Key Takeaways From The Study

Average Loss

  • 89% of individual traders suffered an average loss of Rs 1.1 lakh during the previous fiscal.

  • 90% of active individual traders incurred an average loss of Rs 1.25 lakh.

Average Profit

  • 11% individual traders made an average profit of Rs 1.5 lakh in FY22.

  • Only 6% of active traders booked an average profit of Rs 3,400.

  • Among active traders, excluding outliers, the average loss of a loss-maker was over 15 times the average profit by a profit-maker.

  • The top 1% and top 5% of active profit-makers accounted for nearly 51% and 75% of the total net profit earned by the category, respectively.

Profile Of Individual F&O Traders

  • The participation of individual traders in the age group 30-40 years was at 39%, the highest across all age groups, in FY22.

  • The share of individual traders in the 20-30 age group increased from 11% in FY19 to 36% in FY22.