Day trading: The key factors to know

Intraday trading has been on the rise, with the number of participants increasing sharply in recent years. From FY19 to FY23, the number of individual intraday traders skyrocketed from about 1.5 million to 6.9 million, marking a 4.6x increase.

Individual traders contribute most to the day trading volumes. This surge can be attributed to several factors:

• Accessibility of digital trading platforms
• Excitement of daily trading and the chance of making
• A strong FOMO in rising markets
• Growing financial literacy.

Who are the Day Traders?

SEBI's study shows interesting changes in who is trading. A significant portion of the new entrants are young, with traders under 30 years old constituting 48% of the intraday trading population in FY23, up from 18% in FY19.

Who trades the most?

Source: SEBI, NSE, BSE

There has been a noticeable increase in participation from traders in Tier-II and Tier-III cities.

Meanwhile, the involvement of youth in the overall market trading has been on the climb. The rate of demat account openings has soared, predominantly driven by young Indians under 40, many in their 30s or younger. The number of individual traders who traded intraday in the equity cash segment rose over 300% in FY 2022-23, as compared to FY 2018-19, a recent SEBI study revealed.