A new SEBI study reveals that nearly 88% of individual traders in equity derivatives lost money during the 2025-26 financial year. With aggregate losses reaching ₹91,685 crore, the data underscores the significant risks of options trading and the heavy impact of transaction costs on retail portfolios.
A comprehensive study released by the Securities and Exchange Board of India (SEBI) in August 2026 has provided a stark look at the financial outcomes for individual traders in the equity derivatives segment. During the 2025-26 financial year (FY26), 87.7% of individual traders incurred net losses. While the total aggregate net loss for this group fell to ₹91,685 crore from ₹1.12 lakh crore in the previous fiscal year, the reduction was primarily driven by a decline in overall participation rather than a widespread improvement in trading outcomes.
The data shows that active individual traders in the Futures and Options (F&O) segment dropped by approximately 20% to 78.6 lakh, and new entrants into the market fell by nearly 40%. Despite this cooling in participation, the financial burden on those who continued to trade remained severe. Options trading was the primary driver of these outcomes, accounting for 92% of the total aggregate losses recorded by individual traders.
Demographic analysis within the study identifies specific segments that faced higher pressure. Traders under the age of 30 accounted for 43% of the individual trader base and faced a loss rate of 88.6%. Furthermore, individuals with an annual income of less than ₹5 lakh made up the bulk of the participants, representing 53% of the total aggregate losses. These figures highlight the vulnerability of younger and lower-income investors to the high risks inherent in derivative trading.
Beyond market movements, the study also sheds light on the hidden cost of frequent trading. Individual traders paid approximately ₹25,000 crore in transaction costs during the fiscal year. These costs, combined with the risks of leverage and short-duration trading strategies, often place retail traders at a disadvantage compared to institutional entities that possess larger capital buffers and advanced infrastructure.
The findings point to several persistent issues, including the use of high-risk strategies like expiry-day trading and a reliance on leverage without adequate risk management. The study suggests that even when market participants attempt to trade with limited capital, the combination of transaction costs and behavioral biases—such as the tendency to overtrade after losses or assume disproportionate risk—often leads to a negative-sum outcome for the retail segment. As the market evolves, the data indicates that profitability remains heavily skewed toward institutional and algorithmic traders, while retail traders continue to face systemic challenges in generating consistent returns.