Today, SEBI shared the research paper analyzing the trends in participation and in profits and losses in intraday trading by individuals in the equity cash segment where it found that that more than 70% (7 out of 10) of individual intraday traders in equity cash segment have incurred losses in FY 2022-23.
The study covers the periods of FY 2018-19, FY 2021-22, and FY 2022-23, to comparatively analyze the trends before and after the pandemic and 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.
Major findings as per the study
Participation
Around one (1) in three (3) individuals who trade in equity cash segment, trades intraday.
The 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 number of individual traders who traded intraday in the equity cash segment, rose over 300% in FY 2022-23, as compared to FY 2018-19
Share of āVery Smallā traders (annual intraday turnover less than Rs. 50,000), increased
to 56% in FY23 from 27% in FY19.
Proportion of Profit/Loss-makers
7 out of 10 individual intraday traders (71%) in the equity cash segment incurred a net loss in FY 2022-23.
The 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 (age less than 30 years) was higher (76% in FY 2022-23) as compared to other age groups.
Even after 3 years of experience, 54% of traders were loss-makers in FY23, but this
reflected a much lower percentage as compared to overall loss-makers (71%) in FY23
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.
Trading and Net Profit/Loss
Distribution of turnover of individual traders is highly skewed. The bottom 78% of traders (by intraday turnover) accounted for less than 1% of the total intraday turnover of all individual traders in FY23. On the other hand, the top 6% of traders accounted for more than 90% of the turnover.
During FY23, 76% of individual traders with annual intraday turnover more than Rs. 1 crore were loss-makers.
individual traders with an annual turnover of more than Rs. 1 crore incurred an average P/L of (-) Rs. 34,977 during FY23. For such tradersā groups, the average profit by profit-makers was Rs. 89,172 while the average loss by loss-makers was Rs. 74,575 during FY23.
The average number of trades by loss-makers was higher than the profit-makers.
Cost of Trading
In FY23, loss-makers exacerbated their trading losses by 57% due to trading costs. Profit makers incurred 19% of their trading profits as trading costs in FY23.
On comparing āsingleā vs āmarriedā traders group, āmarriedā traders group had higher proportion of profit-makers than āsingleā traders group across all the three years.
Average loss incurred by āMarriedā traders was lower than the average loss made by āSingleā traders across all the years under the study.
Please add feature in Kite for male users trading using an account in their own name,
to support uploading photo of āwife/mother/sisterā
which will be shown next to the Buy/Sell button.
Maybe it will help psychologically with better risk-management.
Now that i thought of this feature in the past 5 seconds,
It is a MUST-HAVE FEATURE! Cannot trade without it.
Why have you not implemented this feature already yesterday!
3 other brokers that didnāt exist last week are already providing this feature.
@Meher_Smaran
Maybe itās because married guys have daily practice of dealing with unpredictable things and are experts at immediately accepting their mistakes
Thanks for sharing.
Finally some concrete stats to back-up what iāve been telling folks - Adding some friction to retail-trading
is NOT going to significantly impact market-liqudity negatively.
In recent times, the average retail trader is bearing massive losses (on a personal scale)
and NOT even helping with maintaining liquidity,
which is one of the typical excuses given when asked about why should they be even allowed to trade.
What the hell man - Is current friction not enough already ? Equity has the highest STT among all classes and is disgustingly high for overnight trades. So basically very short term overnight trades are highly discouraged and you will have to go towards most volatile stocks to manage.
Increase friction and top1% will reduce trades in response too. I had to do that after 2021 and cut down my trades by half because of lower edge per trade.
It will also increase bid ask spreads from market makers, they need to cover costs too
And what is the rationale for increasing friction ? What does it do besides transferring more money to govt ?
Adding friction does not deter loss making traders generally, because people dont look at cost
Report itself says that losing traders lose a lot of money to this friction. In effect, friction stabs deeper. This friction also causes increase in impact costs as market makers will also need better cut to manage their expenses. These days my impact cost is 25-50% higher than execution costs. So both of these factors gives you most of the damage which people with small/no edge cannot overcome.
Generally people dont have edge. Which means that returns will tend to 0 over large sample of trades because they make entries as good as random ( otherwise they could enter in reverse direction). So all/most of the money they lose is to govt and as slippage. So yes lets increase that even more now, huh ?
Also, i trade 1000-2000 trades a year and do fine. Taking more trades is not bad but we need to have good margin of profit.
I guess, we have to now get ready for higher STT in cash intraday too. Sebi is preparing the rationale for next budget. BJP budgets are just bad news after bad news for traders who actually make money through short term trading.
comment on male traders who use accounts of their wife/mother/sister etc to trade 
