Sebi Study On Intraday Trading In Equity Cash Segment Throws Eye-Opening Results

Market regulator Securities and Exchange Board of India has conducted a study on intraday trading which has given some eye-opening results. According to the study 70 per cent of intraday trading results in loss for the traders. “7 out of 10 individual intraday traders in equity cash segment make losses,” the study revealed. Sebi's study said that more than 70% of individual intraday traders in the equity cash segment have incurred losses in FY 2022-23. Showcasing the contrast, the study also found that there is a surge of over 300 per cent in the number of individual traders participating in intraday trading in the equity cash segment in the same period compared to FY 2018-19.

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Sebi's study covered the periods of FY 2018-19, FY 2021-22 and FY 2022-23 so that it can analyse comparatively the trends which are there in the trading before and after the Covid-19 pandemic.

Other major findings of the Sebi study are:

-        One in three traders is involved in intraday trading in the equity cash segment

-        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

-        The proportion of loss-makers increased to 80% for traders with very frequent trading activity

-        More younger traders (age less  than  30 years) are incurring losses (76% in FY 2022-23) as compared to other age groups

-        Loss-makers are doing more average trade 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.

These results are expected to be an eye-opener for over-enthusiastic traders and will enhance awareness among individual traders about the risks involved in intraday trading in the equity cash segment.