SEBI: Nearly 90% of individual derivatives traders lost money in FY26

A SEBI study for FY26 found 87.7% of individual equity derivatives traders incurred losses, though aggregate losses fell. The number of active traders and new entrants declined, while the average loss per trader slightly increased to Rs 1.17 lakh.

Nearly nine out of ten individual traders in the equity derivatives segment incurred losses in the financial year 2025-26, even as aggregate losses declined from the previous year, according to studies released by the Securities and Exchange Board of India (SEBI) on Thursday.

The SEBI studies found that 87.7 per cent of individual traders incurred losses during FY26, while their aggregate net losses stood at around Rs 91,685 crore, compared with approximately Rs 1.12 lakh crore in FY25.

Decline in Retail Participation

"Despite lower aggregate losses, 87.7% of individual traders continued to incur losses during FY26," the study said. The number of active individual traders also declined by about 20 per cent, from 98.1 lakh in FY25 to 78.6 lakh in FY26, while new entrants fell by about 40 per cent, indicating moderation in retail participation.

The average loss per trader increased marginally to around Rs 1.17 lakh during FY26, the study said. Individual traders also incurred transaction costs of around Rs 25,000 crore during the year, taking cumulative transaction costs over FY22-FY26 to approximately Rs 1 lakh crore.

Options Trading Dominates Losses

Options trading accounted for around 92 per cent of the aggregate losses incurred by individual traders. The SEBI study on trading behaviour found that options buying continued to dominate retail participation, with nearly 97 per cent of traders predominantly following option-buying strategies, while only around 2 per cent were classified as predominantly options sellers.

"Options buyers continued to account for the overwhelming majority of traders and recorded substantially weaker outcomes than Options sellers," the study said.

Factors Influencing Losses

The findings also highlighted a strong link between trading intensity and losses. Higher turnover relative to capital employed or equity portfolio was associated with higher loss rates, while younger investors, lower-income groups and traders with relatively small equity portfolios showed substantially higher trading intensity relative to their financial resources.

Persistence of Losses

Losses were also found to persist among traders. Among those who incurred losses for two consecutive years and continued trading, around 90 per cent incurred losses again in the following year. The study further noted that approximately 85 per cent of trader-quarter observations were loss-making, compared with only around 15 per cent that were profitable.

About the SEBI Study

SEBI said the studies, conducted by its Department of Economic and Policy Analysis, analyse client-level data on equity derivatives transactions, transaction costs, investor demographics, trading behaviour and participation patterns. The profitability study is based on data from the top 15 brokers, representing approximately 90 per cent of individual investors in the equity derivatives segment. (ANI)

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