Women Traders Outperform Men In Equity Derivatives, 93% F&O Traders Suffer Losses In FY22-24: SEBI

In a revealing analysis released by the Securities and Exchange Board of India (SEBI), it has come to light that women traders in the equity derivatives segment are not only better at managing risks but also experience lower average net losses compared to their male counterparts. This finding, dated September 23, offers insights into trading behaviours and outcomes over the fiscal years 2022 to 2024.

While the percentage of women participating in the futures and options (F&O) market has decreased-from 14.9% in FY22 to 13.7% in FY24-their performance remains noteworthy. The study shows that despite this decline, women traders reported average net losses significantly lower than those of male traders. Specifically, female traders faced an average loss of Rs 75,973 in FY24, while male traders suffered an average loss of Rs 88,804.

Moreover, the proportion of loss-making female traders was considerably less than their male counterparts. In FY24, approximately 91.9% of male traders recorded losses in the F&O segment, compared to only 86.3% of female traders. This discrepancy highlights a critical trend: even as fewer women participate in trading, those who do tend to exhibit greater resilience amid market volatility.

The SEBI study also sheds light on the broader landscape of individual traders in the F&O segment, revealing that nine out of ten traders incurred significant losses. Over the three-year period from FY22 to FY24, total aggregate losses in this segment reached an alarming Rs 1.8 lakh crore. The data indicates that more than one crore loss-making traders-92.8% of individual traders-lost an average of Rs 2 lakh each. Among these, the top 3.5% of loss-makers, approximately 4 lakh traders, experienced average losses as high as Rs 28 lakh per person since FY22.

On the profitability front, the analysis highlights a grim picture for individual traders. Only 1% of participants managed to achieve profits exceeding Rs 1 lakh after accounting for transaction costs. This suggests that trading in the F&O market can be lucrative.

The findings of this analysis have important implications for both individual traders and regulatory bodies. For female traders, the data suggests a strong ability to manage risk and minimize losses, potentially pointing to a more cautious and strategic trading approach. Conversely, the decline in their overall participation raises questions about the barriers that may exist for women in the trading environment, warranting further investigation and possible intervention.

The large-scale losses among individual traders serve as a warning to both seasoned and novice investors alike. With a significant percentage of traders facing losses, it emphasizes the necessity for enhanced financial education, better risk management strategies, and possibly more supportive regulatory measures aimed at fostering a healthier trading ecosystem.