This article summarises a public study by the Securities and Exchange Board of India (SEBI) and adds our own commentary. The source is credited under "Sources & credits" below. Nothing here is investment advice.
In September 2024, SEBI published an updated study of profits and losses in India's equity futures and options (F&O) segment. It is one of the clearest pictures any regulator has published of how individual traders actually fare in derivatives.
What the study found
According to SEBI's press release:
- About 93% of individual traders in equity F&O incurred losses over the three years from FY22 to FY24. The study covered more than one crore individual traders.
- Their aggregate losses exceeded ₹1.8 lakh crore over those three years, and the average loss per trader was around ₹2 lakh, including transaction costs.
- Most loss-making traders kept trading. Over three-quarters of those who lost money in the two preceding years continued to trade F&O.
An earlier SEBI study, published in January 2023, had found that 89% of individual F&O traders lost money in FY22. The updated study shows the pattern did not improve as participation grew.
Our reading of the numbers
The study does not say derivatives are bad, and it does not say no one can trade them well. It says that the way most individuals trade them does not work. A few patterns stand out to us:
Costs are not a footnote. Brokerage, exchange charges, taxes and slippage are paid on every trade, win or lose. A strategy that trades often needs a real edge just to cover them. Many retail approaches never check whether they do.
Persistence without feedback is expensive. Traders who keep losing for years are rarely measuring why. Without a written rule set and a record of every trade, there is nothing to learn from.
Tips are not a strategy. A call from a group or a channel has no stated rules, no tested history and no risk limits. It cannot be validated, so it cannot be trusted.
What disciplined trading looks like instead
The traders and desks that last tend to share the same habits:
- Written rules for entries, exits, sizing and when not to trade.
- Honest testing against real costs and data the strategy has not seen.
- Risk limits set first, including a maximum daily loss and a kill switch that does not depend on willpower.
- Automation where it removes emotion and execution errors.
- A trade log that is reviewed, so mistakes become rules.
None of these guarantee profits. They do make it possible to know, early and cheaply, whether an approach has an edge at all.
Sources & credits
- Securities and Exchange Board of India (SEBI), "Updated SEBI study reveals 93% of individual traders incurred losses in equity F&O between FY22 and FY24; aggregate losses exceed ₹1.8 lakh crores over three years", press release, 23 September 2024. Read the release
All figures are SEBI's. This post summarises them in our own words and adds our own commentary.