In August 2026 SEBI published two studies of the same people: individuals who trade equity derivatives in India. One counts the money. The other watches how they behave. They are the first thing I would hand a friend who is about to open an F&O account. The headline, from the profitability study: 87.7% of individual traders had a net loss in FY26, Rs 91,685 crore in all. This lesson reads the studies the way you would read a balance sheet: who is counted, which year, before or after costs, and what the number cannot tell you.
3By the end you can
- Ask four questions of any loss number: who, which money, how big a sample, which edition.
- Redo one row of SEBI's table and reproduce its headline share.
- Explain five patterns that sit behind nine in ten losing, and what they do not prove.
The idea, plainly
A loss study is a report card for a whole market, and a report card is only as good as the questions put to it. Ask four.
Who is counted?
SEBI's "individual traders" are retail and high net worth traders together: resident individuals, HUFs, NRIs, sole proprietors and individuals investing through a PMS. Prop desks, foreign portfolio investors, funds and companies sit in separate categories. Module F02 maps them.
Which money, and how much of the market?
Gross means before costs. Net means after brokerage, exchange charges, STT, GST, stamp duty and SEBI's fee. In FY26 a little over eight in ten individuals lost money before costs, and 87.7% after them. The profitability study covers about nine in ten individual traders, through a sample of brokers. The behaviour study draws a random sample of about five thousand traders, and SEBI calls what it finds there indicative.
Which edition?
Numbers get revised. FY25's loss was restated upward when the broker sample grew from thirteen to fifteen brokers. The famous "9 out of 10" comes from SEBI's January 2023 study, which looked at FY19 and FY22, and SEBI's investor page still quotes it. The August 2026 studies say the same thing on a wider base. Quote the study, the month and the year, never just "SEBI says".
What the studies found
About nine in ten individual traders lost money in every year from FY22 to FY26. The share fell to 87.7% in FY26, the lowest of the five, in a year when the number of active traders fell by nearly a fifth. SEBI itself warns against reading that as better results. Net losses were Rs 91,685 crore in FY26, after a peak in FY25, and over the five years they passed three and a half lakh crore rupees.
Individuals' net losses rose every year to FY25 and eased in FY26
Brokerage and STT made up seven tenths of individuals' costs in FY26
Trading longer did not lower the share of losers: it raised it
Read 3 more paragraphs, 175 words
Options carry over nine tenths of individuals' losses, and nearly all individual traders mainly buy options. Sellers lose less often but not less: the few who mainly sold options had the lowest share of loss makers, and an average loss, when they lost, more than ten times that of those who mainly bought. Win rate is not expectancy, and module F13 shows the same trap on a dated Nifty week.
Costs sit on top. Individuals paid about Rs 25,000 crore a year in costs in FY25 and FY26. For loss makers, costs ate about a third of their gross losses, against about a fifth of the gross profits of profit makers.
Time did not help. The longer a trader had traded without a break, the more likely a net loss. And losses repeat: of the traders who lost in each of the two years before, about nine in ten lost again. Among those active in all five years from FY22 to FY26, about two thirds lost in every year and 0.5% won in every year.
So why do nine in ten lose?
SEBI gives patterns, not a proof. Five stand out.
- It is close to zero sum before costs. Individuals' gross losses were broadly matched by the gross profits of companies and institutions, and costs come on top.
- The product. In FY26 more than half of index option turnover happened on the expiry day itself, where a small premium can go to zero within hours.
- Losses outsize gains. The average loss of a loss maker ran about a fifth above the average profit of a profit maker.
- Losses repeat. Most who lost in two years in a row lost again, and many kept trading.
- The other side is organised. Nearly all of the gross profit of FPIs and prop traders came from entities that use algorithms. Few individuals do.
These describe groups, and none of them is a forecast for one trader.
Worked example: redo one row of SEBI's table
A headline is a claim you can check. Table 32 of the profitability study gives FY26 as a row, and the division takes a minute.
| Step | What we read, FY26 | Value |
|---|---|---|
| 1 | Individual traders in the sample, lakh | 78.60 |
| 2 | Of them, with a net loss, lakh | 68.90 |
| 3 | Share with a net loss: step 2 divided by step 1 | 87.7% |
| 4 | Net loss of all of them, after costs | Rs 91,685 crore |
| 5 | Average per trader: step 4 divided by step 1 | Rs 1.17 lakh |
The term this section turns on: Net loss
Read 2 more paragraphs, 134 words
The division gives the 87.7% SEBI prints, and the average in step 5 matches SEBI's printed figure once its unrounded counts are used. Three things to notice. The sample is the traders SEBI could see through its brokers, so it is a large share of the market and not the whole of it. The loss is net, after every charge. And the average hides the spread: SEBI finds that nearly a quarter of traders account for close to nine tenths of the losses.
Now take the costs out of the picture. Without them a little over eight in ten were still losing, so most of the loss is the trading itself, and costs tip the rest. SEBI counts several lakh traders each year who made a gross profit and ended with a net loss.
The common mistake
The belief: Nine in ten lose, so one in ten wins every year, and I will be one of them.
The tenth person is a different one each year. Among traders who were active in all five years, only a tiny share won in every year, and about two thirds lost in every year. The share of losers rose with the years traded. A base rate is where you start before skill, costs and the product are counted, so read it as the odds of the room, then ask which of the five patterns you would be fighting.
Key takeaways
- Nearly nine in ten individual traders lost money in each year from FY22 to FY26.
- Net means after costs and gross means before. Always check which one a number is.
- Options carry over nine tenths of individual losses, and nearly all individuals buy them.
- Trading longer did not lower the share of losers. It raised it.
- The one in ten who win is a different group each year.
- Quote the study, the month and the year. Numbers get revised.
Two terms to hold on to from 12.3
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study