1 week ago
SEBI Finds Young Investors Face Heavy F&O Losses
Many young people in India are trading futures and options, which can be risky.
In FY26, people under 30 made up 43% of individual traders.
About nine out of ten young traders lost money.
Nearly three-fourths of traders earned less than ₹5 lakh per year.
This lower-income group produced 53% of all individual traders’ losses.
Total losses fell compared with the previous year, but the average loss became larger.
Options caused most of the losses, especially contracts traded very close to their expiry date.
Most individual options traders lost money, more than futures traders.
People outside India’s top 30 cities also made up a large share of derivatives traders.
Traders under 30 represented 43% of individual F&O traders in FY26, up from 31% in FY22.
About 88.5% to 89% of traders under 30 lost money, compared with 81% of those above 60.
Nearly three-fourths of traders earned below ₹5 lakh annually and accounted for 53% of aggregate losses.
Individual traders’ net losses fell 18% to ₹91,685 crore in FY26, but average loss rose to ₹1.17 lakh.
Options generated 92% of retail losses, with 59% of index-options turnover occurring on expiry day.
- Who
- Individual futures and options traders, especially those under 30 and those earning below ₹5 lakh annually, according to a Securities and Exchange Board of India study.
- What
- The study found that most retail derivatives traders lost money, with options responsible for most aggregate losses.
- Where
- India’s equity-derivatives market, including activity by investors outside the country’s top 30 cities.
- When
- The findings cover financial year 2025-26, with comparisons with FY22 and FY25.
- Why
- Losses were concentrated in highly leveraged options trading, particularly contracts traded on or near expiry.
Key facts
- Young traders
- Traders under 30 accounted for 43% of individual traders in FY26, compared with 31% in FY22.
- Young traders’ losses
- Around 88.5% to 89% of traders under 30 incurred losses in FY26.
- Low-income traders
- About 73% to 75% of individual derivatives traders reported annual incomes below ₹5 lakh.
- Low-income losses
- Traders earning below ₹5 lakh accounted for 43% of turnover and 53% of aggregate losses.
- Aggregate losses
- Individual traders’ net losses fell 18% from about ₹1.12 lakh crore in FY25 to ₹91,685 crore in FY26.
- Average loss
- Average loss per trader increased from about ₹1.14 lakh to ₹1.17 lakh.
- Options losses
- Options accounted for 92% of individual traders’ aggregate losses; about 87.7% of options traders lost money.
- Expiry-focused trading
- In FY26, 59% of index-options turnover occurred on expiry day, 75% within one day of expiry, and 97% within one week.
Quotes
Securities and Exchange Board of India study
Regulatory study cited in the article on retail derivatives trading losses
“The high incidence of retail losses observed in India is consistent with global evidence, with around two-thirds to nine in ten retail participants in several derivatives and leveraged-product markets incurring losses.”
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Sources
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