SEBI Study Reveals Heavy Losses for Retail Traders in F&O

In September 2024, a recent SEBI study revealed that nearly 93% of individual traders in the futures and options (F&O) segment suffered significant losses, amounting to over Rs 1.8 lakh crore between FY22 and FY24.

Around 1.13 crore individual traders in the F&O segment incurred collective net losses of Rs 1.81 lakh crore, inclusive of transaction costs, over the three-year period.
In FY24 alone, individual traders faced net losses of Rs 75,000 crore, with most traders experiencing average losses of Rs 2 lakh per person.
The top 3.5% of loss-making traders (about 4 lakh individuals) reported average losses of Rs 28 lakh per person between FY22 and FY24, exacerbated by high transaction costs.
Only 7.2% of individual traders in the F&O segment made any profits over the three years, and less than 1% earned profits exceeding Rs 1 lakh.
Foreign portfolio investors (FPIs) and proprietary traders, particularly those using algorithmic trading ("Algo entities"), recorded significant profits in the F&O market, with proprietary traders earning Rs 33,000 crore and FPIs making Rs 28,000 crore in FY24.