look news india
Retail traders are continuously incurring losses in equity derivatives trading, with 93 per cent of traders suffering an average loss of Rs 2 lakh in the last three years.
As stated in a report by the Securities and Exchange Board of India (SEBI). According to a new SEBI report, the number of individual investors suffering losses in the F&O segment increased from 89 per cent in FY22 to 91.1 per cent in FY24. This figure plays a key role in shaping the policies of market regulator SEBI when it comes to regulating the F&O segment, which trades over Rs 500 lakh crore daily. SEBI has proposed seven key measures to curb the participation and speculation of retail traders in the derivatives market, which is expected to be approved in the board meeting later this month.
Most traders stick to F&O even after incurring losses
Financial regulators, including the RBI, have repeatedly cautioned investors about the risks involved in the derivatives market and the high probability of facing losses. The market regulator's report draws attention to a serious concern, stating that more than three-quarters of traders continued their trading in the F&O segment despite suffering losses for several consecutive years.
Foreign portfolio investors made huge profits. According to a Sebi report, about 73 lakh traders incurred an average net loss of Rs 1.2 lakh per person in FY24. In contrast, foreign portfolio investors (FPIs) and proprietary traders made gross trading profits of Rs 28,000 crore and Rs 33,000 crore, respectively, in FY24. Algo traders, who use advanced technology and algorithms for trading, made the highest profits.