Ace investor Vijay Kedia points out the pros and cons of futures and options or F&O trading, especially for a beginner who is investing in the stock market. The market mogul said that a newbie hoping to make quick money from the stock market enters F&O trading and ends up losing money. Then the trader starts chasing the money he has lost in the previous trade and eventually loses his other assets.
Speaking on Trading Vs. InvestmentVijay Kedia said, “Trading is no less than a drug. You will sell your house to buy medicine and trade to cover your losses. “You can’t make money off bulls, it’s very difficult to make money from trading and the latest SEBI data shows the same.” Thus, it is better to stick to the basics and remain an investor with a firm belief in the strategy of ‘buy, hold and forget’.
By making this comparison between a stock market investor and an F&O trader, Vijay Kedia has basically tried to draw the attention of stock market investors towards the latest SEBI The data where market regulator disclosed that 89 per cent of F&O traders lost money in FY22. And the average loss incurred by these F&O traders comes to approx. 1.10 lakh per loser in FY22. This means that the average loss incurred by F&O traders in FY22 is 1.10 lakh per person.
Interestingly, SEBI data shows that out of those 11 per cent F&O traders Who? Money earned in FY22 comes at their per capita average income 1.50 lakh simply because 51 percent of the net profit made by the F&O traders went into the pockets of the one percent traders.
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Looking at active F&O traders, in FY19, the total percentage of active traders was 87 per cent which increased by one percentage point to 88 per cent in FY22. 90% of these active F&O traders fall in the group of losers while the remaining 10% managed to make the cut in the group of money makers.
According to SEBI data, the total number of F&O traders in FY19 was 7,06,757 which increased by 540 per cent to 45,24,841 in FY22. In FY19, the total number of active F&O traders stood at 6,17,652, an increase of about 544 per cent to 39,76,419 active traders.
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