SEBI Reports Retail Traders Lost 91,685 Crore Rupees in FY26

The Securities and Exchange Board of India released two analytical studies showing that 87.7% of individual traders in the equity derivatives market lost money during fiscal year 2026. Aggregate net losses for retail investors totaled approximately 91,685 crore rupees, a decrease from 1.12 lakh crore rupees in the previous year. The regulator attributed this decline to a 20% drop in active individual traders rather than better performance, as the average loss per trader rose slightly to 1.17 lakh rupees.

Options trading drove 92% of these losses, with 97% of retail traders using option-buying strategies. Higher loss rates were most prevalent among younger and lower-income investors, while trading experience did not meaningfully improve outcomes. Individual traders also incurred 25,000 crore rupees in transaction costs during the period.

Proprietary trading firms saw gross profits from equity derivatives fall 3% to 445 billion rupees, while foreign portfolio investor profits more than halved to 139 billion rupees. Despite the decline, 99% of gains for these professional groups were generated by algorithmic trading entities. Aishvarya Dadheech noted that volatility and the lack of a clear market trend caused profits to decline across investor categories.

To protect retail investors, the regulator introduced measures in late 2024 including increased contract sizes and tighter position limits. Additionally, the central bank tightened funding rules for brokers and proprietary traders.