9 out of 10 individual traders incur losses in Equity F&O.
India is the world’s largest market for trading Equity F&O, which most experts consider nothing but a form of gambling to make quick bucks, which has also seen tremendous growth within a few years. An average loss of 1.25 lakh INR was incurred by 90% of active F&O traders.
Reports from the top 10 Stockbrokers show that in FY19 there were only 7 Lakh individual traders in the F&O segment, which grew to 45 Lakh in FY22. Around 88% of the active traders were making consistent losses.
With fast mobile apps and zero brokerage which lure traders, F&O is becoming a rapidly growing trend. In FY22 35% of the traders were in the age group of 20-30, while in FY19 the number stood at 11%. New traders enter the F&O segment without prior knowledge only to make quick money by getting influenced online. People spend most of their trading capital by taking tips from social media, websites, and friends, which leads to loss-making trades and increased risk.
An online survey showed that only 42% of traders used stop loss in half of their trades while 16% rarely used it, which is a key component in managing risk in trades.
F&O Update:
In a recent update, NSE stated that it will be revising the lot sizes for all derivative weekly, monthly, quarterly, and half-yearly contracts starting from April 26, 2024.
The new lot size for -
NIFTY 50 is to be cut from 50 to 25.
FINNIFTY is to be cut from 40 to 25.
MIDCPNIFTY is to be cut from 75 to 50.
Last but not least Savdhan rahe Satark rahe!
Like the story Follow, Share, and Subscribe for more!