Intraday traders aged below 30 years has grown 48 per cent in 2022-23, says SEBI study

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A SEBI study has found that young intraday traders, aged below 30 years has grown to 48 per cent in 2022-23, an official statement said on Wednesday.

The objective of the Securities and Exchange Board of India (SEBI) study was to analyse trading by individuals in intraday cash segment during the study period -FY19, FY22 and FY23.

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The study has been peer reviewed by a working group with representation from academia, brokers and market experts.

It includes examining trends in participation by the individual traders, annual profit and loss incurred by them and analysing trading patterns of small and large traders on the basis of their turnover, trade size and number of trades.

The periods of study have been selected to comparatively analyse the trends before and after Covid-19 outbreak.

The study also found that more than 70% (7 out of 10) of individual intraday traders in equity cash segment have incurred losses in the FY 2022-23.

Read the entire study and its findings here

Some of the major findings of the SEBI study were:

- Around one (1) in three (3) individuals who trade in equity cash segment, trades intraday.

- Number of individual traders who traded intraday in equity cash segment, rose over 300% in FY 2022-23, as compared to FY 2018-19.

- Share of young intraday traders (age less than 30 years) has grown to 48% in FY 2022-23 as compared to 18% in FY 2018-19.

- 7 out of 10 individual intraday traders (71%) in equity cash segment incurred net loss in FY 2022-23. Proportion of loss-makers increased to 80% for traders with very frequent (more than 500 trades in a year) trading activity.

- The percentage of loss-makers among younger traders whose age was less than 30 years was higher (76% in FY 2022-23) as compared to other age groups.

- Average number of trades by loss-makers was higher than the profit-makers.

- Over and above the trading losses incurred, loss makers expended an additional 57% of their trading losses as trading costs in FY 2022-23; Profit makers spent 19% of their trading profits as trading costs in FY 2022-23.

- The study is expected to enhance awareness among individual traders about the risks involved in intraday trading in equity cash segment.

It has also noted a surge of three times or over 300% in the number of individuals participating in intraday trading in equity cash segment in FY 2022-23 compared to FY 2018-19.

The statement said that the study covers the periods of FY 2018-19, FY 2021-22 and FY 2022-23, in order to comparatively analyse the trends before and after the pandemic. The study is based on a sample of individual clients of the top-10 stock brokers, accounting for around 86% of the individual client count in the equity cash segment during FY 2022-23.

"The study is different and distinct from the report dated January 25, 2023 on F&O trading conducted by SEBI earlier," the official statement said.