Vaeshnavi Kasthuril
Chennai, 4 October
Intraday trading has gained popularity as a way to make fast money, especially among young adults.
Anitya Nagdeve, 22, learned about intraday trading in late 2018. He saw this as a path to financial independence. But like many others, he did not realize the risk and complexities involved.
Nagdeve watched over 50 YouTube channels and took 10-15 online courses. He later dismissed many as “scams” for their shallow financial content.
After all this research, Nagdeve still lost Rs30,000 in his first week of trading and his losses mounted to Rs1.5 lakh within a month.
Nagdeve’s experience is not an outlier. Data from the Securities and Exchange Board of India (SEBI) shows that 76% of loss-making intraday traders are under the age of 30. This shows a bigger issue of financial illiteracy among young Indians, especially in high-risk activities like day trading.
The regulator’s annual accounts show that the Investor Protection and Education Fund (IPEF), which aims to promote financial education, saw a decline in allocation. In FY24 expenses fell to Rs2.8 crore, down from Rs11.9 crore in FY23 and Rs28.8 crore in FY21. The fund is for investor awareness, supporting associations, and aiding the Ombudsman.
Financial knowledge in India is below the global average, a report by IIM Ahmedabad said.
The report indicates that while 60% of young Indians think they are financially prepared, only 22-23% of young professionals demonstrated strong financial knowledge. Students fared even worse, with over half struggling with basic concepts like compound interest, inflation, and diversification.
The bullish trend in the market after the Covid-19 pandemic has led to a belief that high profits are easily achievable but the reality is often much more complex, as many traders encounter high losses along the way. SEBI conducted 43,826 awareness programs in FY24, yet financial literacy among young adults remains low.
“I wanted to make money but ended up losing more than I had invested,” said Nagdeve. Emails and calls to SEBI did not elicit a response.
Nagdeve’s story is one among the 76% of traders who learnt that quick money often comes with a heavy price.