91% of Individual F&O Traders Faced Losses in FY25 Despite SEBI Regulations

Majority of Individual F&O Traders Incur Losses Despite SEBI Curbs: Study

A recent study has revealed that 91% of individual traders engaged in futures and options (F&O) trading in India incurred losses during FY25, despite regulatory efforts to curb excessive speculation. The findings underscore the significant risks inherent in derivative trading, particularly for retail investors without robust risk management strategies.

According to the research, the total number of active individual traders in the F&O segment has continued to grow. However, the average net loss per trader increased to ₹1.2 lakh, reflecting both the complexity of these instruments and the limited effectiveness of the recent measures implemented by the Securities and Exchange Board of India (SEBI).

Key Highlights from the Study

Participation Surge: Even after SEBI tightened regulations on margin requirements and leveraged trading, individual participation remained high.

Limited Risk Awareness: Many retail traders continued to enter complex derivative contracts without adequate understanding of the associated risks.

Disproportionate Impact: The majority of losses were concentrated among young and first-time traders seeking quick returns.

Why This Matters

The report serves as a cautionary tale about speculative trading, reinforcing the need for:

Investor Education: Clear communication of F&O risks to retail investors.

Risk Management: Emphasis on disciplined approaches over impulsive speculation.

Policy Vigilance: Continuous monitoring to ensure protective measures remain effective as trading volumes evolve.

For businesses and professionals, these findings highlight the broader implications of financial literacy gaps and the importance of informed investment decision-making.