SEBI report reveals the ugly truth of F&O trading in India – 93% of retail traders incurred losses

• SEBI has revealed a report on the profit and losses suffered by retail traders in the equity derivatives segment.
• As per the report, 93% of investors lost their money in the derivatives segment.
• The report also adds that only 1% of retail investors managed to make a profit of ₹1 lakh and above annually.

A report by the Securities Exchange Board of India (SEBI) on the profit and losses in the equity derivatives segment has revealed how badly retail investors are performing in the futures and options (F&O) market.

There has been an increase in participation in the F&O market by retail investors. With the increased volumes, the government and the Reserve Bank of India (RBI) have been taking steps to keep this under check.

“With the increased participation of individual investors in equity and equity derivatives markets, the current study was undertaken to analyse profit and loss patterns for individual traders in F&O during the three years FY22 to FY24, and for all the categories,” said SEBI in its report.

This is not the first time SEBI has published such a report. In an earlier report, the watchdog revealed that nearly 90% of retail traders lost money in the equity derivatives segment in FY22.

What are futures and options (F&O)?

Futures and Options (F&O) are financial derivatives used in trading and investing, primarily in stock markets, commodities, and other assets. They allow investors to speculate on the future price movements of underlying stocks or hedge risks.

Retailers lost over ₹1.8 lakh crore in three years

As per the report, retail investors lost a staggering ₹1.8 lakh crore in aggregate losses over the last three fiscal years. Out of the 1 crore investors engaged in the F&O market, 93% of investors or 9 out of 10 investors had an average loss of ₹2 lakh each. The retail investors lost ₹61,000 crore in FY24.

As per the report, only 7.2% of retail F&O traders managed to make a profit over the last three years.

Among these loss-making investors, around 4 lakh investors suffered an average loss of ₹28 lakh each including transaction costs.

What’s more shocking is that only 1% of the investors managed to make a profit exceeding ₹1 lakh after deducting the transaction costs, making one wonder what’s the allure of F&O trading.

Not only are retailers not making any money, but they also spend ₹26,000 per person on average on transaction costs.

It’s not the rich that are losing money

The report further states that 76% of the traders who suffered losses have reported an income of under ₹5 lakh.

Nearly half of the traders are under 30 years old, meaning at the start of their careers. Further, over 72% of traders come from small towns.

Addiction? Retailers continue despite losses

Whether it is an addiction or the hope of recovering money, over 75% of loss-making retail investors continued to trade in the derivatives segment despite being in a loss for two years.

Social media influencers to be blamed?

Several social media financial influencers or “finfluencers” have been pushing F&O trading as a get-rich-quick scheme. These financial influencers often use fake trading proofs to exaggerate their returns and push retail investors to enter the derivatives market.

The people then push their “courses” or services offering recommendations to users. They charge for this service and users often end up spending money on this after being blinded by the fake proofs.


The number of retail traders in the F&O market has seen a massive increase, with traders increasing from around 50 lakh in FY22 to nearly 1 crore in FY24.

SEBI recently introduced new norms to regulate unregistered financial influencers in the country. In three separate notifications, the stock market watchdog has brought in new norms amid growing concerns about the potential risk associated with such finfluencers.

While these regulations are a start, there is a need for greater control over these “paid groups” that sell recommendations and the usage of fraudulent income proofs.

Big traders bet on algos

Coming to the large proprietary traders and foreign funds, these made a profit of ₹33,000 crore and ₹28,000 crore respectively in FY24.

Out of this, 96% of profitable proprietary traders and 97% of foreign funds used trading algorithms.

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