Rs 91,685 cr gone! Retail traders lose big despite Sebi’s guardrails

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Key points

• Top Trending Stocks: SBI Share Cost, Axis Bank Share Rate, HDFC Bank Share Cost, Infosys Share Rate, Wipro Share Cost, NTPC Share Rate.
• While new entrants dropped concerning 40%, meanwhie, active individual traders declined regarding 20% to 78.6 lakh in FY26 from 98.1 lakh in FY25.
• 88% retail investors lost funds in F&O trading in FY26 even after strict Sebi rules.
• F&O trading losses FY26retail investors IndiaSebi report FY26individual traders lossesequity derivatives market.
• Sebi remarked around 92% of aggregate losses incurred by individual traders came from options trading.

Rs 91, 685 crore gone! 88% retail investors lost funds in F&O trading in FY26 even after strict Sebi rules.

Rs 91, 685 crore gone! 88% retail investors lost funds in F&O trading in FY26 even after strict Sebi rules. ETMarkets.comLast Updated: Aug 20, 2026, 08: 53: 00 PM IST.

Individual traders incurred substantial losses in India's equity derivatives market during FY26. Options trading accounted for the vast majority of these aggregate net losses. Active traders declined significantly, and new entrants additionally dropped considerably. Smaller investors with limited equity holdings experienced heavier losses than larger ones. For context, the profit pool remained concentrated with institutional and professional traders.

Individual traders continued to lose heavily in India's equity derivatives market in FY26, even as overall retail participation moderated after regulatory tightening and a slowdown in speculative trading. A new Sebi study indicated that almost 88% or 9 out of 10 individual traders still incurred losses in FY26. Average loss per trader rose marginally to regarding Rs 1.17 lakh during the year. The share of loss-making individuals declined 3.2 percentage points, to 87.7% in FY26 from 90.9% in FY25. Sebi study indicated individual traders posted aggregate net losses of concerning Rs 91, 685 crore in FY26, compared with regarding Rs 1.12 lakh crore in FY25. The fall in total losses came mainly since the number of active individual traders declined, not as outcomes improved meaningfully for those who continued trading.

While new entrants dropped concerning 40%, meanwhie, active individual traders declined regarding 20% to 78.6 lakh in FY26 from 98.1 lakh in FY25. The findings are part of two analytical studies published by Sebi's Department of Economic and Policy Analysis. The first study looked at profitability of individual traders in the equity derivatives segment during FY25 and FY26. The second examined trading behaviour during the same period. For context, the profitability study is based on data from the top 15 brokers in the equity derivatives segment, covering regarding 90% of all individual investors in the segment. The trading behaviour study is based mainly on a random sample of 5, 000 individual traders, along with profitability data from the top 15 brokers. Live Events.

Options remained the main source of losses. Sebi remarked around 92% of aggregate losses incurred by individual traders came from options trading. The share of traders who traded in futures declined marginally to 6.6% from 6.7%. Transaction costs continued to the pressure. Individual traders paid around Rs 25, 000 crore in transaction costs in FY26. Over FY22-FY26, cumulative transaction costs paid by individuals stood at around Rs 1 lakh crore. Sebi remarked even though derivatives premium turnover moderated during FY26, total transaction costs remained broadly unchanged as of the growth in Securities Transaction Tax from October 1, 2024. The study additionally demonstrated that losses were heavier among smaller investors. While almost 78% had equity portfolios below Rs 1 lakh, regarding 35% of individual derivatives traders had no equity holdings. Traders with equity portfolios below Rs 1 lakh accounted for regarding 70% of aggregate losses, despite contributing only concerning half of the turnover. Loss rates additionally fell as portfolio size climbed. Sebi remarked 93% of traders with no equity holding produced losses, compared with 58% of traders holding more than Rs 10 crore in equity portfolios. Meanwhile, the profit pool, meanwhile, remained tilted towards institutional and professional traders. Proprietary traders recorded the highest gross trading profit at regarding Rs 44, 000 crore, followed by FPIs at Rs 14, 000 crore, corporates at Rs 8, 000 crore, mutual funds at Rs 3, 000 crore and partnership firms or LLPs at Rs 3, 000 crore. Sebi remarked 99% of profits for FPIs and proprietary traders came from algo entities. Retail trading was additionally highly concentrated near expiry. Around 59% of index options turnover came from contracts expiring on the same day, known as 0DTE contracts. Around 75% of turnover came from contracts expiring within one day, and 97% came from contracts expiring within one week. Sebi's trading behaviour study indicated that options buying dominated retail activity. While only concerning 2% were classified as mainly options sellers, almost 97% of traders mainly followed option-buying strategies. Options sellers were the only strategy group to record positive median returns on capital employed in FY26. The study additionally identified that higher trading intensity was linked to higher loss rates. Younger investors, lower-income groups and traders with small equity portfolios indicated much higher trading intensity relative to their financial resources. Experience did not improve outcomes in a meaningful way. Sebi remarked traders with a number of consecutive years of derivatives participation recorded similarly high loss rates. Losses additionally persisted: among traders who lost capital for two straight years and continued trading, around 90% lost funds again in the after year. Quarterly data indicated the same pattern. While only 15% were profitable, regarding 85% of trader-quarter observations were loss-making. Among traders who had both profitable and loss-making quarters, almost 79% produced smaller average gains in profitable quarters than the average losses they suffered in losing quarters. The study additionally demonstrated that plenty of traders exit after losses. Between 28% and 40% of traders active in one quarter did not trade in the next quarter. Of those who halted trading, around 86-89% had incurred losses in the previous quarter. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times).

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In short, rs 91, 685 cr gone! Retail traders lose big despite Sebi's guardrails is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.