Synopsis

Sebi Chairman Tuhin Kanta Pandey said regulatory measures have helped reduce aggregate F&O losses, but individual traders continue to lose money. Sebi’s latest study showed individual traders’ net losses fell to Rs 91,685 crore in FY26 from Rs 1.12 lakh crore in FY25, while 88% still reported losses.

Sebi Chairman Tuhin Kanta Pandey on Thursday said regulatory measures in the equity derivatives market have helped reduce aggregate F&O losses, but individual traders continue to incur losses even after staying in the segment for several years.

A latest Sebi study showed that losses in futures and options have declined from Rs 1.12 lakh crore to around Rs 90,000 crore after the regulator's interventions. However, Pandey said many traders continue to lose money even after three to four years of participation, making it important for investors to assess whether derivatives trading is suitable for them.

The market regulator will continue to monitor derivatives trading, he said.

The comments come against the backdrop of Sebi’s latest study on individual traders in the equity derivatives segment for FY26. The study, released in August, showed that individual traders' aggregate net losses fell to about Rs 91,685 crore in FY26 from about Rs 1.12 lakh crore in FY25. However, 88% of individual traders still incurred losses during the year.

Participation had cooled after Sebi tightened derivatives rules. Individual traders in equity derivatives fell about 20% in FY26. The pace of exits also increased, with 46 lakh traders who had participated in FY25 not returning in FY26. This compared with 26 lakh exits in the previous year.

Retail losses remain high

Sebi findings suggest that while overall losses have reduced, the odds remain poor for individual traders. Nearly nine out of ten individual traders continued to lose money in FY26. The reduction in aggregate losses was partly because fewer traders participated in the segment after the regulator introduced measures to cool excessive speculation.

Sebi had earlier introduced steps such as higher contract sizes for index derivatives, fewer weekly index expiries and upfront collection of option premiums. These measures were aimed at reducing speculative retail activity and improving investor protection.

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The study also showed a sharp divide between individual traders and larger market participants.

Proprietary traders recorded the highest gross trading profit at about Rs 44,000 crore in FY26, followed by foreign portfolio investors at about Rs 14,000 crore. Sebi said 99% of profits made by foreign portfolio investors and proprietary traders came from algorithmic trading entities.

This reinforces the concern that individual traders are competing in a market where larger, faster and better-capitalised participants have a structural advantage.

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