Earning from the stock market is not a bad thing, but if you have become addicted to investing in futures and options in the stock market, then there are high chances of you incurring huge losses. We are not telling you this to scare you at all, a study report of SEBI has come out. In which more than one crore people have lost Rs 1.8 lakh crore by investing in it in the last three years. Let us also tell you what kind of scary figures have been presented by SEBI.

Who suffered how much loss?

1. According to a study report released by market regulator SEBI on Monday, 91 percent i.e. 73 lakh individual traders have suffered losses in the futures and options segment in the last financial year 2023-24. These traders suffered an average net loss of Rs 1.2 lakh per person.
2. Apart from this, out of more than one crore individual traders associated with this segment, 93 percent suffered an average loss of about two lakh rupees (including transaction costs) per trader during the three years i.e. from FY 2021-22 to FY 2023-24.
3. The total loss of such traders during this period was more than Rs 1.8 lakh crore. In the financial year 2023-24 itself, the traders suffered a net loss of about Rs 75,000 crore.
4. A study by the Securities and Exchange Board of India (SEBI) found that the top 3.5 percent loss-makers… about four lakh traders… suffered an average loss of Rs 28 lakh per person during the same period, including transaction costs.
5. On the other hand, only 7.2 percent of individual traders made profits over the three years and only one percent of individual traders managed to earn profits of more than Rs 1 lakh after adjusting for transaction costs.
6. Apart from this, the number of retail traders or individual traders almost doubled in two years to about 96 lakh in FY 2023-24 from about 51 lakh in 2021-22. However, such investors contributed about 30 percent of the total turnover in FY 2023-24.

Need for investor education and risk management.

SEBI said that the availability of good business platforms and low transaction costs have helped retail investors to actively trade in futures and options contracts. This has increased liquidity in the market. The regulator said that the rapid increase in activities in the futures and options segment (F&O) has pointed out the need for investor education and risk management activities, as a large part of retail traders are suffering losses in the market. Earlier, SEBI had published a report in January 2023. It found that 89 percent of individual traders in the equity futures and options segment lost their money in the financial year 2021-22.

What was the purpose of SEBI?

With the increasing participation of individual investors in the stock and equity futures and options market, SEBI has conducted this study. Its purpose was to assess the profit and loss situation of individual traders in the futures and options segment during the financial years 2021-22 and 2023-24. Also, to analyze the profit and loss situation in the futures and options segment during 2023-24 for all categories of investors.

They got a huge benefit.

According to the report, while individuals incurred losses in the futures and options segment, foreign portfolio investors (FPIs) and financial institutions made profits. Financial entities earned a gross profit of about Rs 33,000 crore in the futures and options segment in FY 2023-24. It was followed by FPIs which earned a gross profit of about Rs 28,000 crore.

In contrast, individuals and others incurred losses of over Rs 61,000 crore in FY2023-24 (before accounting for transaction costs). The share of young traders (below 30 years of age) in terms of population increased to 43 percent in FY2023-24 from 31 percent in the previous fiscal. Of these, about 93 percent of young traders incurred losses in the futures and options segment in FY2023-24.