This page summarises what the published account records reveal about the level of trading costs incurred by traders. Five documents contain the measured values, broken down into four entries. Two of these are studies of the household financial records of the same United States discount broker from the 1990s. One is a study of the complete transaction records of a national stock exchange. In two reports, the Australian Securities and Investments Commission (ASIC) documents what happened to clients of a leveraged product.
The information relates to the situation as at 31 August 2026.
Barber and Odean divided the retail households of a United States discount broker into five equal groups. They sorted them according to the percentage of their portfolio they rebalanced each month and determined what each group earned. The most active group and its comparison with the market index are shown on the Active and passive page. Before costs were deducted, the five groups achieved almost identical returns. A gross return is the return before deducting the bid-ask spread and commissions. An investment replicating the average investment behaviour of each household in each group would have achieved a gross return of between 18.5% and 18.7% per annum across all five groups. The bid-ask spread is the difference between the price at which a share can be sold and the higher price at which it can be bought at the same moment. A trade bridges this difference. After deducting costs, the five groups diverged. The least active group achieved an annual net return of 18.5%. The study puts the trading costs of the most active group at 57 basis points per month, or 6.8% per annum. It compares these costs with the returns of the least active households. One basis point is equal to one hundredth of a percentage point. The group referred to in the study as "High Turnover" comprises the fifth of households that reallocate more than 8.8% of their portfolio each month.
Source Barber and Odean, "Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors", Journal of Finance 55(2), 2000, section IV and Figure 1, read from the authors' own posted copy on 31 August 2026. The same paper's other figures, and the sentence in which the authors say what explained the shortfall, are on Active and passive and are not repeated here.
The five groups do not constitute five experimental groups. Households decided for themselves to what extent they traded; therefore, a household's membership of a particular group is its own decision. The groups may therefore differ in respects not apparent from the data. What the almost identical gross returns demonstrate is more narrowly defined and clearer: whatever else distinguished the groups from one another, it was not the shares they selected. The period under review ran from January 1991 to December 1996, six years during which a market index weighted by company size achieved an annual return of 17.9%. These are self-managed accounts held with a discount broker in the United States. They contain only ordinary shares. Investment funds, options, warrants and depositary receipts were excluded from the analysis.
The records from the same broker include the gender of the person who opened the first account for each household. Barber and Odean used this information to compare the two groups over the period from February 1991 to January 1997. Of the 37,664 households for which this person could be identified, 29,659 had accounts opened by men and 8,005 by women. Women turned over approximately 53% of their share portfolio each year, while men turned over approximately 77%. The study presents this as men trading 45% more than women. The study itself summarises the associated costs by stating that trading reduced men's net returns by 2.65 percentage points per year. For women, the same summary puts this figure at 1.72 percentage points per year.
Before costs, the difference between women and men, each measured against the portfolio they held at the start of the year, was 0.34% per annum. The study classifies this as significant at the 1% significance level, that is, women did slightly better as a group. After costs, the difference was 0.94% per annum, at the same significance level, tested directly rather than inferred from two separate comparisons against zero. The authors summarise it: "Men lower their returns more than women because they trade more, not because their security selections are worse."
Before costs were deducted, men achieved 18.7% a year and women 18.6%. After costs, men achieved 16.3% and women 16.9%. Among single-person households, these differences were even greater. Single men traded 67% more than single women and reduced their returns by 1.44 percentage points more per year.
Source Barber and Odean, "Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment", Quarterly Journal of Economics 116(1), 2001, pages 261 to 292, abstract, section III.A and Table II, read from the authors' own posted copy on 31 August 2026.
One study, one broker, a six-year period. The comparison is made between accounts rather than between individuals. The gender recorded is that of the person who opened the household's first account, which is not necessarily the person who carried out the trading transactions. The authors regard this as a known limitation. They address it by breaking down the sample by marital status, which is why single-person households are reported separately. The two groups also differ considerably in size: 29,659 compared with 8,005. The study measured how much each group traded and what costs were incurred in the process. The study's hypothesis, and its own interpretation of the results, is that confidence in one's own judgement explains the difference in trading behaviour. The records contain no measurement of confidence.
Barber, Lee, Liu and Odean analysed the Taiwan Stock Exchange's own transaction data for the period from 1992 to 2006. This comprises 3.7 billion buy and sell transactions, with the identity of each individual trader recorded. This represents the entire market, not just the clients of a single firm. In the study, a day trader is defined as an investor who buys and sells the same share on the same day. In an average year during this period, around 450,000 Taiwanese private individuals engaged in day trading. Day trading accounted for 17% of the total trading volume on the stock exchange, a proportion that the study describes as having remained stable over the fifteen-year period. Over 1992 to 2006, 81.4% of Taiwanese day traders lost money. Over 1998 and 1999, 64.2% of a sample of 324 United States day traders lost money. And 97% of Brazilian futures day traders who persisted at least 300 days lost money. The Active and passive page sets out what lies behind the round numbers usually quoted.
In an average year, 277,000 private individuals carried out day-trading transactions worth more than 600,000 New Taiwan dollars, which is equivalent to approximately 20,000 United States dollars. Around 20% of them achieved positive abnormal returns that year after deducting commissions and transaction taxes. The authors report that this proportion fluctuates between 17% and 20%, depending on how the population is defined. The authors also ranked traders based on their returns over one year and then monitored their performance the following year. The study itself concludes that "less than 1% of the day trader population is able to predictably and reliably earn positive abnormal returns net of fees". According to the study, the top 500 traders from the previous year achieved 37.9 basis points per day after fees, while the group at the bottom of the ranking recorded a loss of 28.9 basis points per day.
Sources Barber, Lee, Liu and Odean, "The cross-section of speculator skill: Evidence from day trading", Journal of Financial Markets 18, 2014, pages 1 to 24, abstract and sections 1 and 3, read from the authors' own posted copy on 31 August 2026; Jordan and Diltz, "The Profitability of Day Traders", Financial Analysts Journal, 2003; and Chague, De-Losso and Giovannetti, "Day trading for a living?", 2020 working paper. The last two are quoted from their published abstracts, as on Active and passive.
One market, one activity and a period of fifteen years. Taiwan levies a tax of 30 basis points on sales. The costs incurred by a Taiwanese day trader therefore do not correspond to those faced by an Australian investor. Returns are calculated on the assumption that the value of a trade corresponds to the trader's capital at risk, that is, any cash balances are ignored.
In addition to these metrics, two statements are usually cited. One relates to the review of accounts by a major fund manager, in which nobody had traded. The other gives a rounded percentage of short-term traders who incur losses. Both are listed on the Active and passive page.
A contract for difference (CFD) is an agreement to exchange the price change of an asset without owning the asset itself. It is usually traded with leverage. This means that the client contributes only a fraction of the position's value and bears the profit or loss on the full value. ASIC tracks the results of clients of firms that issue these contracts. It has now published two surveys, one before and one after a regulatory change. The first of the two was published in August 2019, based on data collected as part of its 2017 review of the retail over-the-counter (OTC) derivatives sector. It reported that 72% of clients trading contracts for difference (CFDs) lost money. It also reported that 63% of clients trading foreign exchange on margin lost money, as did 80% of clients trading binary options. ASIC subsequently issued a product intervention order, and its report from January 2026 covers the financial year 2023–2024. The key figures from this survey are listed on the Active and passive page. That page also contains the corresponding published figures for the United Kingdom and for Europe. ASIC itself reports in its summary that "in FY 24, 85% of retail clients made a net loss trading options CFDs". It is also reported in the same summary that 74% of new retail clients acquired through paid online advertising lost money.
Sources ASIC, Report 626, "Consumer harm from OTC binary options and CFDs", August 2019, whose three percentages carry ASIC's own note that the data was collected in its 2017 review of the sector; and ASIC, Report 828, "Risky business: Driving change in CFD issuers' distribution practices", 20 January 2026, executive summary, Table 1 and Appendix 2, Table 2. Both were read from ASIC's own download addresses on 31 August 2026.
These two figures relate to different time periods, different groups of licence holders and, in the case of Report 626, to three products rather than one. The regulatory change was not the only difference between 2017 and 2024. Furthermore, each survey relates to a single financial year and not to a group of clients observed over a longer period. The table on new customer activity contained in Report 828 shows that the number of active new retail customers declined. According to the table, this figure stood at 8,193 in the first quarter of that year and at 2,694 in the fourth quarter. Contracts for difference (CFDs) are leveraged derivatives sold to retail clients, and neither of the two reports describes investment in ordinary shares.
No Australian study was found that categorises retail investors by trading volume and specifies what each group earned. None was found in brokerage records, share register records or any other Australian source. Nor was any found that compares Australian accounts in the same way as the aforementioned study covering the years 1991 to 1997. What does exist in this area for Australia is the regulatory authority's survey of a single leveraged product, namely the entry mentioned above. The questions that could be answered in this area using existing records are listed in the questions section of the page What is known about the effectiveness of financial advice?
Source that no such Australian study was found is this practice's own search, of 31 August 2026.
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