If you are young, restless and ready to invest to make a killing in the derivatives market, latest data from Sebi (Securities and Exchange Board of India) suggest that you must stay away from it. Else, you are very likely to end up with a big loss. Let’s see the data that Sebi has painstakingly collated.
In the report on the F&O segment published in September this year, Sebi has mentioned how young investors have specially lost money.
Sebi has found that the share of traders below 30 years of age in the F&O markets has gone up dramatically from 31% to 43% between FY23 and FY24.
“As traders age increased, the percentage of loss-makers in F&O declined, indicating relative risk aversion, better risk management or the experience coming into play for elderly traders compared to young traders. The percentage of loss-makers for young traders (age less than 30 years) was higher (93% in FY24) as compared to other age groups. On the other hand, the percentage of loss-makers in elderly traders (age greater than 60 years) was relatively lower at 79% in FY24,” stated the report.
The income-wise breakdown seemed to show that the tendency of the lower income traders felt a bigger urge to trade in derivatives, perhaps to make a killing.
“Nearly 76% of the Individual F&O traders (i.e. 65.4
lakh F&O traders) had declared annual income of less than Rs 5 lakh and ~94% of the Individual F&O traders (i.e. 80.5 lakh F&O traders) had declared annual income of less than Rs 10 lakh in FY24,” the report said.
“The proportion of “Low Income” traders has increased significantly from 71% in FY22 to 76% in FY24,” Sebi added.
The Sebi report has mentioned that about 93% of these young (below 30) traders sustained losses in F&O in FY24. Of the overall sample, 91.1% suffered losses last year.
Equity market snapshot
In a recent report, NSE showed that more than 40% of the investors in the equity market are below 30 years of age. While those below 30 constitute 40.1% of the total equity investors, those between 30 and 39 form 29.2%, those between 40 and 49 form 15.4% while just 8% are from the 50-59-year bracket. The smallest share 7.3% are from the 60-69 years cohort.
An investment revolution is sweeping India with the young and restless plunging into the choppy waters of derivatives. Sebi data indicates why you should not. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
