The Securities and Exchange Board of India (SEBI) has released studies on the trading behaviour and profitability of individual investors in the equity derivatives segment for FY 2025-26. The findings show that 87.7% of individual derivatives traders incurred losses during FY26, despite a decline in both overall losses and retail participation compared with the previous financial year.
Individual traders recorded aggregate net losses of approximately Rs 91,685 crore in FY26, down from nearly Rs 1.12 lakh crore in FY25. However, the number of active individual traders declined by around 20%, from 98.1 lakh in FY25 to 78.6 lakh in FY26. New market entrants also decreased by nearly 40%, indicating a significant moderation in retail participation.
The average loss per individual trader stood at approximately Rs 1.17 lakh during FY26. In addition to trading losses, individual participants incurred transaction costs of around Rs 25,000 crore during the year, taking the cumulative transaction costs for FY22-FY26 to nearly Rs 1 lakh crore.
Options remained the major contributor to retail trading losses, accounting for approximately 92% of the total aggregate losses. SEBI's findings also showed that options buying continued to be the dominant strategy, with nearly 97% of individual traders primarily engaged in option buying, while approximately 2% were predominantly options sellers.
The study identified trading intensity as an important factor associated with losses. Traders with higher turnover relative to their available capital or equity portfolio recorded higher loss rates. Younger investors, individuals from lower-income groups and traders with smaller equity portfolios were also found to have comparatively higher trading intensity in relation to their financial resources.
SEBI's analysis further highlighted the persistence of losses among frequent derivatives traders. Among traders who had incurred losses for two consecutive years and continued participating in the market, approximately 90% reported losses again in the subsequent year. Overall, nearly 85% of trader-quarter observations were loss-making, while only around 15% were profitable.
The studies were prepared by SEBI's Department of Economic and Policy Analysis using client-level information covering equity derivatives transactions, transaction costs, investor characteristics, trading behaviour and participation trends. The profitability analysis was based on data obtained from the top 15 brokers, representing approximately 90% of individual investors in the equity derivatives segment. CASansaar