India’s retail participation in the equity derivatives market declined significantly in FY26, while aggregate losses among individual traders also fell, according to data highlighted in SEBI’s study on the profitability of individual traders in the equity derivatives segment.

The FY26 data shows that 87.7% of individual traders were loss-making, compared with 90.9% in FY25. Although the proportion of traders losing money improved by 3.2 percentage points, nearly nine out of every ten individual traders still ended the year in losses.

Aggregate net losses also declined sharply. Individual traders recorded a combined net loss of ₹91,685 crore in FY26, down 18% from ₹1,11,788 crore in FY25. However, the average loss per loss-making trader increased slightly to around ₹1.17 lakh from ₹1.14 lakh in FY25, a rise of about 2%.

The decline in participation was another major feature of FY26. The study’s snapshot shows 87.5 lakh active individual traders, 18% lower than the 106.2 lakh recorded in FY25.

New trader entries fell sharply during the year. New entrants declined 40%, from 34.3 lakh in FY25 to 20.8 lakh in FY26. At the same time, exits increased substantially. Existing trader exits rose 76%, from 26 lakh to 46 lakh.

The decline in participation was also reflected in derivatives turnover.

Futures turnover fell 15%https://sensexnifty.com/russias-svr-accuses-west-and-ukraine-of-planning-anti-russian-provocation-in-latin-americ, from ₹463 lakh crore in FY25 to ₹394 lakh crore in FY26. Options premium turnover, however, moved in the opposite direction, increasing 7% from ₹178 lakh crore to ₹191 lakh crore.

Overall equity derivatives traded turnover declined 9%, from ₹641 lakh crore in FY25 to ₹585 lakh crore in FY26.

The profit-and-loss numbers provide a clearer picture of the challenges faced by retail participants. In FY25, individual traders collectively lost ₹1,11,788 crore. This declined to ₹91,685 crore in FY26, representing an 18% reduction in aggregate losses.

However, the improvement in aggregate losses does not mean that individual traders became broadly profitable. The percentage of loss-making traders remained extremely high at 87.7%.

The average loss per loss-making trader also increased to ₹1.17 lakh in FY26 from ₹1.14 lakh in FY25. This means that while fewer traders participated and total losses declined, those who continued to lose money still faced a slightly higher average loss.

The latest figures are broadly consistent with government data presented in Parliament. According to the Finance Ministry, the number of unique individual investors in the equity F&O segment declined from 98.1 lakh in FY25 to 78.6 lakh in FY26, while aggregate individual losses fell from ₹1,11,788 crore to ₹91,685 crore. The average loss per person was reported at ₹1,16,654 in FY26.

The decline in retail participation and losses came after SEBI introduced several measures aimed at reducing excessive speculation and improving risk management in the derivatives market. These included changes to weekly index derivatives, higher contract sizes for index derivatives, increased tail-risk coverage on expiry days, upfront collection of option premiums, changes to calendar-spread treatment on expiry days and intraday monitoring of position limits.

SEBI’s earlier FY25 study had already shown that around 91% of individual traders in the equity derivatives segment were losing money. The regulator’s FY25 analysis recorded losses of ₹1,05,603 crore after transaction costs and showed that 91% of traders were loss-makers.

The FY26 numbers therefore suggest that the regulatory measures have coincided with a reduction in retail participation, trading turnover and aggregate losses. However, the persistently high percentage of loss-making traders highlights the risks associated with leveraged futures and options trading.

For retail traders, the data reinforces the importance of risk management, position sizing, trading discipline and understanding the costs and risks involved in derivatives. High trading activity does not necessarily translate into profitability, and the latest SEBI data shows that the majority of individual participants continued to lose money despite the overall improvement in aggregate losses.

SEBI’s FY26 snapshot can therefore be summed up in three major trends: fewer individual traders, lower aggregate losses and a modest improvement in the percentage of profitable participants. Yet with 87.7% of individual traders still recording losses, retail F&O trading remains a high-risk segment for individual market participants.

Source: SEBI study on profitability of individual traders in the equity derivatives segment, FY25-FY26; Ministry of Finance data presented in Rajya Sabha.