A recent SEBI report revealed that Gujarat’s Futures and Options (F&O) traders incurred a staggering ₹8,888 crore loss in FY24, ranking the state second nationwide in F&O losses. The report titled “Analysis of Profit & Losses in the Equity Derivatives Segment (FY22-FY24)” highlights a nationwide trend of mounting losses, with 86.26 lakh traders across India losing a collective ₹75,000 crore during the fiscal year.
Geographical Concentration of Traders The SEBI analysis shows that more than half of India’s F&O traders in FY24 were concentrated in four key states: Maharashtra, Gujarat, Uttar Pradesh, and Rajasthan. Maharashtra led with 18.8 lakh traders (21.7%), followed by Gujarat with 10.1 lakh traders (11.6%), Uttar Pradesh at 9.3 lakh traders (10.7%), and Rajasthan contributing 5.4 lakh traders (6.2%).
Losses by State In Gujarat, the average loss per trader amounted to ₹88,000, while Maharashtra’s traders incurred ₹13,912 crore in losses, with an average per capita loss of ₹74,000. Uttar Pradesh traders lost ₹6,789 crore, averaging ₹73,000 in individual losses, and Rajasthan traders faced ₹83,000 in average losses.
Persistence Despite Losses A notable finding from the report is that despite facing two consecutive years of losses, 76.3% of loss-making traders continued engaging in F&O trading. Out of 24.4 lakh traders who lost money in both FY22 and FY23, 18.6 lakh persisted into the third year, though only 8.3% managed to turn a profit.
Young Investors at Risk Stock market expert Jaydev Chudasama emphasized the rising appeal of F&O trades, particularly among younger investors. He pointed out that many under-35 traders are lured by the potential for quick profits but often lack proper research or strategy, leading to heavy losses. Chudasama likened the appeal of F&O trading to gambling, warning that the trend is contributing to significant financial setbacks despite the continued rise in F&O investments.
Political Criticism The Gujarat Congress has criticized the ruling government for ignoring the financial plight of young investors, accusing it of turning a blind eye while personal savings and retirement funds are wiped out in the stock market’s F&O segment. Spokesperson Hiren Banker underscored the seriousness of the situation, quoting Warren Buffett’s famous description of derivatives as “weapons of mass destruction.”
Key Takeaways
- Gujarat’s traders lost ₹8,888 crore in FY24, with an average personal loss of ₹88,000.
- Across India, F&O traders lost ₹75,000 crore in FY24.
- Despite consecutive losses, 76.3% of traders persisted with F&O trades into the third year.
- Young investors, particularly under-35, are increasingly drawn to F&O trading, often incurring significant losses.
