Understand SEBI’s finding that 93% of individual equity F&O traders lost money during FY22–FY24 and the behavioural, leverage and cost risks behind it.
The 93% figure is not a slogan about one bad month. It came from SEBI’s study of individual equity-derivatives trading over three financial years.
Decide whether F&O belongs in the investor’s plan at all, before choosing a strategy or broker.
Read the SEBI study and broker risk disclosures.
Broker ledger and contract notes.
Using salary or emergency money.
SEBI reported that 93% of individual traders incurred losses in equity futures and options between FY22 and FY24, with aggregate losses exceeding ₹1.8 lakh crore. The study is historical evidence, not a promise that a specific trader will lose or win.
Derivatives create nonlinear outcomes. A small premium or margin can control a much larger exposure, while time decay, volatility, gap risk and forced square-off can move the result faster than a cash-equity investor expects.
Gross trading profit is not the right benchmark. Brokerage, statutory levies, exchange charges, taxes, bid–ask spread, slippage and repeated losses determine the investor’s net result.
| Area | What to assess | Investor rule |
|---|---|---|
| Capital at risk | Money that can be lost without affecting goals. | Exclude emergency and borrowed funds. |
| Maximum loss | Worst credible loss after gaps and execution. | Do not rely only on a stop-loss order. |
| Trading edge | Repeatable reason the strategy should work after costs. | Use a written and tested rule. |
| Behaviour | Frequency, revenge trading and position sizing. | Set hard limits before trading. |
A trader should compare F&O with the simplest alternative: a diversified long-term portfolio aligned with goals. The burden of proof is on the complex strategy, not on the basic investment plan.
Track drawdown, net return, time spent and rule violations for at least a meaningful sample. One profitable week does not establish an edge.
The investor should record the product, entity, amount, expected return source, maximum credible loss, liquidity, cost, holding period and exit route before transferring money. A decision that cannot be explained without a price target or influencer claim is not yet an investment thesis.
Regulations, product terms, charges, taxes and complaint procedures can change. Use the latest official document and the investor’s actual statement rather than an old screenshot or generic online table.
First verify the legal entity and regulated role. A familiar brand, app-store listing, social-media badge or celebrity does not prove that the person receiving money is the registered intermediary.
Second verify the money and asset trail. Payment should move through the appropriate regulated account, and the investment should appear in an independent contract note, depository statement, folio record or lawful product report.
Third compare return with the risk that produces it. High yield, rapid profit, leverage, illiquidity, concentration and complex valuation are not separate from return; they are often the reason the expected return looks attractive.
Fourth preserve evidence. Statements, product documents, risk disclosures, communications, ticket numbers and complaint acknowledgements should be stored outside the app or platform being disputed.
Finally, separate a disappointing market outcome from fraud, mis-selling, unauthorised activity or service failure. The correct complaint route and available relief depend on that distinction.