Why a large number of retail investors traded only on a single day last year

Subscribe to enjoy similar stories.Opportunistic investors who traded for only a single day constituted almost a whopping one-fourth of the 35.8 million active retail investors on the National Stock Exchange (NSE) last fiscal year, data in the bourse's monthly Market Pulse issue showed.Even when aggregated, investors trading up to 10 days constituted 69% of the total active retail base. This reveals a "highly skewed, long-tailed pattern, where bulk of investors trade only a handful of days in a year, while a very small proportion participates regularly," according to NSE's Economic Policy & Research Department (NSE EPR), which prepared the data.In absolute terms, those trading for just one day stood at 8.43 million investors, comprising 24% of the total individual investor base of 35.84 million.

The investor count trading up to two days plummeted to 4.51 million, three days (2.97 million), four days (2.19 million), five days (1.69 million) and between six and ten days 5 million.When aggregated, individuals trading up to 10 days made up 24.82 million, or 69% of the total individual active base. Investors trading up to 50 days made up 33 million or 92% while those trading above 50 days made up just 8% or 2.8 million.Interestingly, the infrequent participants (1-10 days) withdrew a net ₹65,904 crore from the market, suggesting that these investors may be engaging in "short-term, opportunistic trades or reacting to market movements or specific events such as IPO listing or market news, without sustained capital commitment," NSE EPR said.In contrast, the frequent participants, trading upwards of 50 days and comprising just 8% of the retail base, net invested ₹51,369 crore, indicating that "capital-committing participation