Retail F&O losses ease, but frequent traders continue to bear the brunt
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Losses among individual equity derivatives traders remained high in 2025-26, although overall losses moderated from the previous year, showed Securities and Exchange Board of India (Sebi) study on Thursday. The study showed that total losses stood at ₹91,685 crore in FY26, marginally lower than the ₹1.12 trillion in FY25. But despite a fall in cumulative losses, the average loss per trader rose by 2%, from ₹1.13 lakh to ₹1.17 lakh. It also found that 87.7% of individual traders in FY26 incurred losses while trading in the derivatives segment, marginally lower than the 90.9% who reported losses in FY25. However, the number of individual traders in the segment fell for the first time since FY16. In FY26, 8.771 million traders participated in the derivatives segment, 18% fewer than in the previous fiscal. “Losses fell proportionately less than participation did, showing that losses remained substantial among the traders who stayed active,” the study said. This is the fourth study published by the markets regulator analyzing the profits and losses made by individual investors in the derivatives segment in the country. Trading activity remained heavily concentrated among options buyers. In FY26, 93% of traders were classified as “only options buyers” and another 4% as “majorly options buyers”. About 90% of only options buyers and 75% of majorly options buyers incurred losses. Only options buyers refer to traders who enter positions by buying options first and subsequently squaring them off on all trading days. Majorly options buyers engage in option selling for less than 50% of trading days. The study also found a clear link between trading frequency and the size of losses. Traders active for more than 100 days generated 94% of turnover and 87% of total losses. Their average loss was ₹2.76 lakh, compared with ₹22,000 for traders who traded for 100 days or fewer. About 77% of traders used a peak margin of less than ₹1 lakh, similar to the figures seen in FY25, indicating that trading was concentrated among those with small capital. The study found that 90% of such small traders incurred losses in FY26. Among traders with ₹10 lakh to ₹1 crore in losses, the loss-maker rate was lower at 68%. At the same time, the average loss increased sharply with capital deployed, rising from about ₹5,600 among traders using less than ₹10,000 to ₹960,000 among those using ₹10 lakh to ₹1 crore. The study also points to a growing shift towards derivatives-only trading. In FY26, about 1.86 million traders had no cash-market turnover and participated only in derivatives. The number of such traders has risen from fewer than 100,000 before the Covid-19 pandemic to more than 186 million in FY26. Apoorva is a Mumbai-based journalist at Mint who covers the Securities and Exchange Board of India (SEBI), tracking the pulse of India’s capital markets, regulatory developments and the people who operate within them. She holds a postgraduate diploma in business and financial journalism from the Asian College of Journalism, where she developed a strong foundation in markets, companies, and economic policy. She began her journalism journey with an internship at Bloomberg, where she worked across beats such as real estate, infrastructure, capital markets, and deals, which helped her understanding of business and finance.<br><br>She is guided by the belief that everything in this world can be explained in simple and fewer words, and that idea shapes how she approaches her writing. She aims to cut through complexity and present nuanced regulatory and financial developments in a way that is both accessible and meaningful to readers.<br><br>When she is not tracking market chatter, Apoorva can usually be found deep into a fiction novel or out on a long run. She is also a trained classical dancer in Bharatanatyam, Mohiniyattam, and Kathakali. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
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