The allure of risk in finance, epitomized by 'Risk hai to ishq hai,' has led many young individuals into dangerous territory. SEBI's study reveals a fivefold surge in intraday trading, notably among the youth. Despite this, 71% faced losses in FY23. Futures and options trading saw a similar trend, with 93% of retail traders facing losses. The rise is fueled by accessible platforms and influencer endorsements. Dr. Sharma highlights the need for medical intervention for trading addictions. Bajaj stresses the time and effort required to master trading.
The allure of risk in the financial world has often been romanticized, with the famous line from 'Scam 1992' echoing in the minds of many: "Risk hai to ishq hai." However, for numerous young individuals, this infatuation with risk has escalated to perilous heights.
A recent study conducted by the Securities and Exchange Board of India (SEBI) sheds light on a concerning trend. The number of individuals engaging in intraday trading in the equity cash segment has surged almost fivefold, from 15 lakh in FY19 to 69 lakh in FY23. Notably, the proportion of young intraday traders, aged below 30, has surged to 48% in FY23, up from 18% in FY19. Despite the increasing participation, statistics reveal a sobering reality — 71% of intraday traders faced losses in FY23, a rise from 65% in FY19 and 69% in FY22.
Intraday trading, involving the buying and selling of assets within the same day, is just one facet of the trading frenzy gripping many. The volumes in futures and options trading have also witnessed a meteoric rise, accompanied by significant losses. An alarming 93% of retail traders in futures and options have incurred losses over the past three financial years, averaging Rs 2 lakh per person.
The accessibility of trading platforms and the influence of financial influencers promoting 'success stories' have enticed a diverse demographic, from homemakers to students, into the trading realm. Moreover, the market now boasts gamified trading interfaces aimed at newcomers.
Venturing into online forums like Reddit unveils poignant confessions by traders grappling with trading addiction. Among them, a common thread persists — the inability to break free from the vicious cycle of losses and debts, driven by the hope of a miraculous turnaround.
This escalating phenomenon has birthed its own lexicon, with terms like 'revenge trading' and 'FOMO trading' encapsulating the psychological battles waged by traders. Recognizing the gravity of these issues, professionals like Dr. Manoj Kumar Sharma emphasize the necessity of medical intervention for trading addictions akin to gambling or alcoholism.
The global pandemic served as a catalyst for a surge in retail trading activities worldwide. Notably, the perception of traders has shifted from traditional images of professionals in suits to everyday individuals engaging in trading activities from their homes.
Dr. Sharma's experiences with individuals seeking treatment for trading addictions reveal a spectrum of underlying motives, from financial struggles to unmet expectations. Treatment methodologies typically involve cognitive behavior therapy, motivational workshops, support groups, and in some cases, medication.
Vivek Bajaj, a seasoned investor, underscores a critical point — trading is a skill that demands time and dedication to master, akin to other professions like medicine or law. The allure of instant success must be tempered with a realistic understanding of the learning curve inherent in trading.
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