Breaking barriers - Empowering women in the world of trading

In a traditionally male-dominated arena, the percentage of women investing in equities in India increased significantly from 16% to 24% between 2020 and 2022. However, their participation is not limited to long-term stock investment. Women are increasingly trading in high-risk asset classes like the Futures & Options segment. Between financial year 2018-2019 to 2021-2022, the segment registered a 16% increase in female participation. Such improvement in gender equality in the capital markets tends to positively impact the gross domestic product (GDP) as well.

Before we delve into the benefits of financial inclusion and factors encouraging women to become active traders, let’s look at the challenges.

Women have faced several challenges while entering the capital market in the past. Firstly, there was a lack of financial literacy among women, wherein they had limited knowledge of trading in the capital market. Even if women somehow got interested in investing their money in the capital markets, they lacked sufficient funds to undertake trading. The limitation of finances made them risk-averse, preventing them from undertaking high amounts of investments.

The women who had knowledge and financial resources never received the necessary assistance or guidance for making capital market investments. The lack of literacy resources has been real for women, resulting in the lack of technical knowledge required for investments and trade. The jargon used in the market and the difficulty in finding professionals who could help understand the same was part of the many challenges that kept women at bay from making independent decisions. Lastly, the lack of platforms through which they could invest made matters worse.

But technology has resolved all of these challenges for women.

Technology has played a significant role in enabling women to actively participate in capital markets. From access to information to the flexibility of trading online and learning resources, there are numerous ways that technological advancements have encouraged women to come forward and join the capital markets. While earlier, homemakers and women in Tier 2 and Tier 3 did not have access to information about investing in the market, the internet resolves that problem. For working women, the internet has provided them with relevant tools to learn investment strategies and gather data on companies. It’s easier for women to educate themselves about the markets and make informed investing and trading decisions using mobile apps and online platforms offering financial education and literacy resources. It boosts their confidence in financial knowledge.

Furthermore, online brokerage platforms have democratised access to financial markets. Women can now conveniently open investment accounts to buy and sell stocks, bonds, and other financial instruments from anywhere. Here, the traditional barriers to entry, such as eliminating the need for a physical presence on a trading floor, have made a lot of difference, making it easier for women to enter the market and invest with smaller amounts of capital.

Any woman can now access capital markets for trading. Thanks to technology, they can also leverage advanced data analytics and research tools to analyse market trends, track the performance of investments, and make informed decisions, like any other investor and trader. There are also Robo-advisors that use algorithms to create and manage investment portfolios for users. They often have lower minimum investment requirements than traditional wealth management services, making them more accessible to a broader range of investors, including women.

There has been an increasing improvement in gender equality in the capital markets in the past few years. Technology has undeniably transformed societies at large, making them more inclusive and accessible for women. However, a lot more needs to be done to enable women to overcome the entry barriers to the market - like the pay gap, lack of representation in finance-related fields, and cultural biases. People can start at their homes by empowering their daughters and sisters. Women can further help women to create awareness about the benefits of trading and building wealth for the long term.

This article is authored by Sarvjeet Virk, co-founder & managing director, Finvasia.