87.7% of individual traders in equity derivatives lost money in FY26; net losses about ₹91,685 crore: SEBI studies

The two studies

By Press Release PR No. 50/2026 dated 20 August 2026, SEBI released two analytical studies by its Department of Economic and Policy Analysis (DEPA) on individual investors in the Equity Derivatives Segment (EDS), both covering FY25–FY26:

• Profitability of Individual Traders in the Equity Derivatives Segment — based on information from the top 15 brokers, a sample representing approximately 90% of all individual investors in the segment.
• Trading Behaviour of Individual Traders in the Equity Derivatives Segment — primarily based on a random sample of 5,000 individual traders, along with the profitability data from the top 15 brokers.

Profitability: the figures

• Around 92% of aggregate losses of individuals arose from options trading.
• Gross trading profit (before transaction costs): proprietary traders about ₹44,000 crore, FPIs ₹14,000 crore, corporates ₹8,000 crore, mutual funds ₹3,000 crore and partnership firms/LLPs ₹3,000 crore. The gross trading loss of individual traders narrowed to about ₹72,000 crore. 99% of the profits of FPIs and proprietary traders were made by “algo entities” — entities that did at least one trade in a year using an algorithmic order.
• Over FY22–FY26, cumulative transaction costs paid by individuals were approximately ₹1 lakh crore. Although premium turnover moderated in FY26, total transaction costs remained broadly unchanged due to the increase in Securities Transaction Tax effective 1 October 2024.
• Around 75% of index options turnover was in contracts within one day of expiry.
• About 35% of individual EDS traders had no equity holdings and nearly 78% had equity portfolios below ₹1 lakh. These small-portfolio traders accounted for about 70% of aggregate losses while contributing only about half of the turnover.
• Loss rates fall as equity portfolio size increases — from 93% for traders with no equity holding to 58% for those holding over ₹10 crore.

Trading behaviour

• Nearly 97% of traders predominantly followed option-buying strategies; only around 2% were classified as majorly options sellers, the only strategy group with positive median returns on capital employed in FY26.
• Higher turnover relative to capital employed or equity portfolio was associated with higher loss rates. Younger investors, lower-income groups and traders with small equity portfolios showed substantially higher trading intensity relative to their resources.
• Greater trading experience was not associated with improved profitability. Among traders who lost in two consecutive years and continued, around 90% lost again in the following year.
• Approximately 85% of trader-quarter observations were loss-making. Among traders with both profitable and loss-making quarters, nearly 79% had average gains smaller than their average losses.
• Between 28–40% of traders active in one quarter did not trade in the next; of these, around 86–89% had incurred losses in the previous quarter.

What to note

SEBI says the findings are intended to contribute to a better understanding of retail participation in the equity derivatives market and to support informed policy discussions. The press release announces no regulatory change. The full studies are on the SEBI website.