A recent study by the Securities and Exchange Board of India (Sebi) highlights that 91.1% of individual traders in the futures and options (F&O) segment lost money during FY24, raising alarms about the speculative nature of retail trading. This figure translates to approximately 7.3 million traders incurring losses, an increase from the 89% reported in FY22.
Over the three fiscal years from FY22 to FY24, an estimated 11.3 million unique individual traders collectively lost ₹1.81 trillion, with FY24 alone accounting for ₹750 billion in net losses. The analysis examines profit and loss trends for individual F&O traders and broader investment categories.
Only 7.2% of individual F&O traders turned a profit during this period, and merely 1% earned over ₹1 lakh after accounting for transaction costs. Notably, more than 75% of those who incurred losses continued trading in the F&O segment despite previous setbacks.
The report also reveals that while individual traders faced challenges, foreign portfolio investors (FPIs) and proprietary traders reported profits in FY24, with the latter generating ₹330 billion in gross profit and FPIs earning ₹280 billion.
Demographically, half of the F&O traders came from four states: Maharashtra, Gujarat, Uttar Pradesh, and Rajasthan. The participation of traders under 30 years old rose to 43% in FY24, but 93% of this group experienced losses, surpassing the overall average of 91.1%. Additionally, over 75% of individual traders had an annual income below ₹5 lakh.
In response to these findings, Sebi has proposed seven measures aimed at enhancing investor protection and market stability, including raising contract values and tightening margin requirements for sellers.
