1 week ago
SEBI Report Urges Stronger Measures Against Retail F&O Speculation
Many ordinary people in India are losing money by trading financial contracts called futures and options.
Their total losses became smaller in FY26, but they were still extremely large.
Most individual traders buy options, and almost nine out of ten option traders lose money.
Young people and people with smaller incomes trade the most intensely.
Much of this trading happens just before contracts expire.
Big institutions, exchanges, and brokers benefit from the large amount of activity.
The editorial says current rules have not reduced speculation enough.
It suggests raising the tax on options and creating a separate market where institutions can trade with one another.
SEBI reported that retail investors’ net equity-derivatives losses fell to ₹91,685 crore in FY26 from ₹1.12 lakh crore.
Nearly 90% of individual option buyers lose money, with losses most common among low-capital traders.
Trading is concentrated near expiry: 97% of index options are traded within a week, and 75% on the eve of expiry.
The F&O-to-cash volume ratio remained excessive at 343x in July 2026, despite falling from its October 2023 peak of 487x.
The editorial proposes a targeted options transaction-tax increase and a deeper over-the-counter derivatives market for institutional trading.
- Who
- SEBI, individual investors, institutional traders, stock exchanges and brokerages are central to the editorial’s discussion.
- What
- The editorial examines heavy retail losses and excessive speculation in India’s equity futures-and-options market, while proposing stronger regulatory measures.
- Where
- India’s equity-derivatives market, including trading on the NSE and BSE.
- When
- The editorial was published on August 24, 2026; it cites FY26 results and trading data through July 2026.
- Why
- The editorial argues that retail losses, expiry-day speculation, possible cash-price manipulation and wealth transfers to large or foreign traders require stronger action.
Key facts
- Retail losses
- ₹91,685 crore in aggregate net losses during FY26, compared with ₹1.12 lakh crore previously.
- Option buyers
- 97% of individual traders are option buyers.
- Loss-making traders
- Nearly 90% of individual option traders reportedly lose money.
- Expiry concentration
- 97% of index options are traded within a week of expiry, while 75% are traded essentially on the eve of expiry.
- F&O-to-cash ratio
- The combined NSE-BSE ratio was 343x in July 2026 and averaged 372x during the first seven months of 2026.
- Earlier peak
- The ratio reached 487x in October 2023.
- Proposed measures
- The editorial recommends a targeted increase in options STT and policies to deepen the institutional OTC derivatives market.
Sources
Related news
Persisting Retail F&O Losses Renew Calls for Tighter Eligibility Rules
Indian Retail F&O Losses Reach ₹91,685 Crore Despite SEBI Curbs
SEBI Finds 88% of Individual Derivatives Traders Lost Money
SEBI Study Reveals Why Retail F&O Traders Keep Losing
SEBI Curbs Slow Retail Derivatives Rush as Losses Persist
SEBI curbs retail F&O losses by 18 percent in FY26
PVR Inox Buyback: September 3 Last Day to Buy
Indian Stocks Extend Three-Day Losing Streak as Oil Rises
Augmont Enterprises Rises Despite Gold-Buying Appeal and Market Risks
BSE Shares Fall as New Closing Auction Session Draws Scrutiny
Spice Lounge Food Works Stock Hits Upper Circuit Amid Crash
