Individual traders in India lost ₹1,05,603 crore in equity derivatives in the financial year to March 2025.
The figure comes from the regulator, was published in July 2025 and was later confirmed to Parliament. It is after transaction costs, so it shows traders' net losses rather than losses before costs.
This article covers what the data says, what SEBI did, and what it means if you trade derivatives or plan to.
What the studies found
There are two major studies, published three years apart, and their central finding is consistent.
The first, published in September 2024, covered every individual trader in equity F&O from FY22 to FY24. Over those three years, 93 per cent of individual traders lost money. Only 7.2 per cent were profitable, and about 1 per cent made more than ₹1 lakh after costs. Aggregate losses exceeded ₹1.8 lakh crore.
The second, published in July 2025, examined how the segment changed as the new rules were phased in and analysed FY25 profit and loss across the top 13 brokers and around 96 lakh unique traders. In FY25, 91 per cent of individual traders made losses. Net losses rose 41 per cent to ₹1,05,603 crore from ₹74,812 crore in FY24.
Two details from the first study are worth sitting with.
Among the roughly 4 lakh traders in the worst 3.5% of outcomes, the average loss was about ₹28 lakh.
The contrast is striking: 97 per cent of foreign portfolio investor profits and 96 per cent of proprietary trading profits came from algorithmic strategies. That does not mean algorithms caused retail losses, but it illustrates the competitive environment in which individual traders operate.
The scale of the market is also unusual. SEBI's document notes that, in March 2025, Indian exchanges ranked first globally by number of derivative contracts traded, at more than 4.3 times the second-placed exchange, according to World Federation of Exchanges data.
What SEBI did
In October 2024 the regulator announced six changes to the index derivatives framework, phased in over the following six months.
Measure | What it does | From |
|---|---|---|
Contract size raised to ₹15 lakh | Raises the minimum position size | 20 Nov 2024 |
One weekly expiry per exchange | Ended the near daily expiry cycle | 20 Nov 2024 |
Extra 2 per cent margin on short options | Covers tail risk on expiry day | 20 Nov 2024 |
Option premium collected upfront | Buyers pay in full at the outset | 1 Feb 2025 |
Calendar spread benefit removed on expiry day | Closed a margin advantage | 1 Feb 2025 |
Intraday monitoring of position limits | Limits checked through the day, not just at close | 1 Apr 2025 |
The contract size change, the first revision in nine years, is one of the changes traders felt most. The minimum contract value, which had previously been in the ₹5 to ₹10 lakh range, was raised to at least ₹15 lakh.
The reduction in weekly expiries also mattered. Multiple indices once offered weekly contracts across the two exchanges, creating an expiry almost every day. Now each exchange has weekly expiry on one benchmark index.
A further circular on 29 May 2025 changed how open interest is measured. The calculation now reflects how much a position responds to price rather than simply counting contracts.
What changed in 2026
Under Budget 2026-27, securities transaction tax on derivatives went up on 1 April 2026. Futures moved from 0.02 to 0.05 per cent on the sell side, options from 0.10 to 0.15 per cent on the premium when sold, and exercised options from 0.125 to 0.15 per cent.
The Budget left equity delivery and intraday rates alone and aimed the increase squarely at derivatives. It was one of several changes that landed on investors during 2026.
Together with the earlier rule changes, the higher taxes mean the same strategy can cost more today than it did two years ago.
Has any of it worked
Partly. The honest answer is more interesting than either side of the argument suggests.
Participation fell during FY25. Unique individual traders dropped from 61.4 lakh in Q1 FY25 to 42.7 lakh in Q4. SEBI found the sharpest decline among traders with turnover below ₹1 lakh.
Losses in Q4 FY25 fell for the first time, after rising through the previous three.
Against the previous year, index options turnover fell 29% (in notional terms) and unique retail participants fell 20 per cent. Compared to two years earlier, turnover was still up 14 per cent and participants were up 24 per cent.
The segment did not simply shrink. It stopped growing as quickly, from a base already far higher than before the boom.
Across the full year, aggregate losses still widened 41 per cent, while the share of traders losing money barely moved, from 93 per cent to 91 per cent.
If you trade F&O
Five things follow from the data rather than from opinion.
Your costs went up in two ways: through structural changes and through higher tax. A strategy that was only marginally profitable using 2024 costs may look different with 2026 costs. Recalculate it using the current costs instead of older estimates.
You are trading against algorithms. In the study, algorithmic strategies accounted for a large share of the profits reported by foreign portfolio investors and proprietary traders. That is part of the competitive environment retail F&O traders are operating in.
The minimum contract value is higher than before. With contracts at ₹15 lakh and above, each lot represents a larger position than it used to. Trading the same number of lots can therefore involve a different level of risk.
Expiry day is different now. Fewer expiries, higher margins on short options, and no calendar spread benefit. Strategies built around a daily expiry cycle no longer have one.
Leverage has not gone away. A larger contract size means a larger rupee exposure per lot, but it does not remove the possibility of rapid losses. A relatively small move in the underlying can translate into a large percentage change in the capital you have committed to the position.
If you do not trade F&O
If you already invest in equities or mutual funds, you can participate in the market without taking on the additional leverage and expiry-related risks of derivatives.
If the appeal is the possibility of high returns, ask whether you are actually looking to invest or to trade. Those are different activities with different risks. You do not need F&O exposure to participate in the equity market.
Prefer to invest without leverage or expiry risk? Start with equities and mutual funds on Hem Nxt.
Common questions
What are the risks of F&O trading?
Leverage magnifies losses as much as gains, time decay erodes option value, costs apply per trade regardless of outcome, and the regulator's own data shows around nine in ten individual traders lose money.
How many people actually lose money in F&O?
93 per cent over FY22 to FY24, and 91 per cent in FY25, across two SEBI studies. Aggregate individual losses were over ₹1.8 lakh crore in the first period and ₹1,05,603 crore in FY25 alone.
Why did SEBI increase the F&O lot size?
To increase the minimum contract value as part of the broader effort to address risks in the retail derivatives market. Contract value went from a ₹5 to ₹10 lakh range to ₹15 lakh and above, the first revision in nine years.
Why is there only one weekly expiry now?
Multiple weekly contracts across exchanges meant there could be an expiry almost every trading day, and the regulator found the resulting activity carried risks without corresponding benefit. Each exchange now offers weekly expiry on one benchmark index.
Did the STT on F&O go up?
Yes, on 1 April 2026. Futures went from 0.02 to 0.05 per cent and options premium from 0.10 to 0.15 per cent, both on the sell side. Equity delivery and intraday were unchanged.
Have the new rules reduced losses?
Participation has fallen and Q4 losses declined, but the annual picture is less encouraging: aggregate losses still rose 41 per cent and the proportion of individual traders losing money remained around nine in ten.
What income proof do I need for F&O?
Brokers require income proof before enabling the derivatives segment. F&O access is not automatically enabled for a new trading account; the broker has to follow the applicable eligibility requirements.
The short version
Two SEBI studies found that roughly nine in ten individual F&O traders lost money. The rules that followed have raised contract sizes, reduced weekly expiries and increased the cost and margin requirements around some trades.
Participation has fallen, but the annual loss numbers have not yet changed the basic picture: individual traders remain overwhelmingly more likely to lose money than to make it.
The rules can change the trading environment. They cannot remove leverage, costs or the risk of losing money quickly.
Risk disclosure
Hem Finlease Private Limited, SEBI Registration No. INZ000167734. Hem Securities Limited, SEBI Reg. No. IN-DP-568-2021, CDSL: 17700/17701.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI and membership of recognised stock exchanges do not guarantee the performance of the intermediary or provide any assurance of returns to investors.
All Topics
