F&O Retail Losses: What SEBI’s 93% Study Really Says
1. Current position
SEBI’s September 2024 study reported that 93% of individual traders incurred losses in equity futures and options between FY 2021–22 and FY 2023–24, with aggregate losses exceeding ₹1.8 lakh crore over three years. The statistic is historical study evidence. It should not be represented as a real-time 2026 loss ratio or applied automatically to institutions, hedgers or every derivatives segment.
2. How it works in practice
Options can create asymmetric payoffs, but frequent trading, bid–ask spreads, taxes, brokerage, slippage and poor position sizing reduce outcomes. Option buying has limited premium loss per position but repeated expiry losses can accumulate; option selling can expose the trader to large tail losses and margin calls. Hedging and speculation must be separated.
A reliable decision separates the legal rule, the commercial contract and the actual cash flow. A regulatory permission does not guarantee suitability, and a product label does not override the substance of the transaction.
3. Key rules and measurement boundaries
| Item | Position | How to read it |
|---|---|---|
| Study period | FY 2021–22 to FY 2023–24 | Not a live 2026 ratio |
| Finding | 93% of individual traders incurred losses | Defined population and segment |
| Aggregate losses | More than ₹1.8 lakh crore | Three-year study total |
4. Practical example
A trader buys weekly options for ₹8,000 each week. Eight small losses and two ₹20,000 gains feel like several “wins”, but annual cash flow is negative after premiums and charges. A second trader sells options for steady ₹5,000 gains but faces one ₹1.5 lakh gap loss. Win rate alone does not measure risk-adjusted outcome.
5. Action checklist
- Download the broker’s realised P&L including all charges.
- Separate hedging trades from directional speculation.
- Set maximum daily, weekly and capital-at-risk limits.
- Model gap risk and margin increases before selling options.
- Do not use borrowed emergency money for derivatives trading.
6. Evidence and document checklist
- Contract notes and ledger with taxes and charges.
- Strategy-level realised and unrealised P&L.
- Margin statements and peak-margin shortfalls.
- Trade rationale and maximum-loss rule.
- Income-tax records and turnover computation where applicable.
7. Common mistakes
- Quoting gross profit before charges.
- Using win rate without average win and average loss.
- Calling limited-premium risk “safe”.
- Averaging losing leveraged positions without a capital limit.
8. Red flags
- Guaranteed-return Telegram or WhatsApp groups.
- Account access requested by an unregistered person.
- Trades placed to recover losses quickly.
- No understanding of expiry, settlement or margin rules.
9. Complaint or escalation route
Complain first to the broker or intermediary and preserve contract notes. Use SCORES for eligible securities-market grievances and the exchange/arbitration process where applicable. Suspected unauthorised account operation should be reported immediately.
10. FAQs
Does 93% mean every F&O trader will lose?
No. It is an observed result for a defined study population and period, not a guarantee about an individual outcome.
Are option buyers safer than sellers?
Their per-contract loss may be limited to premium, but repeated losses and poor sizing can still cause substantial damage.
Are hedgers included in the same risk conversation?
Hedging has a different objective, but costs, basis risk and execution still matter.
What metric should a trader monitor?
Net realised return after all charges, maximum drawdown, tail exposure and capital at risk—not only win rate.
11. Official sources
Information date: 20 June 2026. Rates, thresholds, portal processes and live proceedings can change; use the linked official material for the transaction or filing date.