SEBI few months ago come with a research report on Future and Options trading. SEBI report says 90% option traders was in loss, after this news many people was in shock and try to learn first.
They shows those who loss money are new comers and have less than 5 Lakhs capital. Average loss was 1.25 Lakhs in options.
Now SEBI again come with a new research report on Equity Intraday Traders. In that report, it shows 70% Intraday traders incur losses. 7 out of 10 intraday traders was in loss. Reason was charges and overtrading.
Intraday trading have margin facility, in intraday client need to sell stocks before 3:15 pm, otherwise broker slap 50 rupees charges on client.
Before FY 2019-2020 margin facility was very high but at that time total traders was stood at 19 Lakhs and now in Financial Year 2023-2024 it was at 68 Lakhs.
According to SEBI, ” future and option volume is at highest, many traders come to market and directly enter into F&O trading.
SEBI Report on Equity Intraday Trading
SEBI has conducted the research paper on analysing the trends in participation and in profits and losses in equity intraday trading by individuals in cash segment.
Some important points on from SEBI reports :-
1) Out of 30 Clients 10 Clients trades in equity intraday segment
2) Trading in Intraday segment increases 300% as compared to FY2019-2020
3) Market shares of traders under the age of 30 rises 48% in FY2023-2024
4) 70 out of 100 traders face loss in daily trading.
5) Loss maker traders proportion increases to 80% those who trade frequently.
6) Overtrading by loss maker tradres was high than profit makers.
7) Profit makers give 19% profit in taxes.
This report shows future and option traders, Intraday traders was in loss. Swing traders and Investors now may be in profits after this report.
Short Term Capital Gain Tax
In Union budget 2024, Finance Minister increases tax on financial assets or in other words simplify. SEBI want to decrease trading volume, that’s why finance minister increases STT on future and options.
STCG tax was increases by 33% as compared to previous tax rates, LTCG tax was currently stood at 12.5%, which was last time 10%. Limit of exempted to 1.25 Lakhs from financial year 2024-2025.
Impact of Tax Increase on Stock market
Stock market participants may decrease because of trading cost. SEBI’s new circular affect brokers and all discount brokers will increase their brokerage charges.
Future and option trading clients shift to long term investing or swing trading. Now you need more margin to take options trade.
