A recent study conducted by the Securities and Exchange Board of India (SEBI) has revealed that a shocking 93% of individual futures and options (F&O) traders have experienced losses between FY22 and FY24.

What Happened: A new SEBI study states that the total losses for these traders amounted to a staggering ₹1.8 lakh crore over the past three fiscal years. The report further highlights that nearly nine out of ten traders suffered average losses of ₹2 lakh each.

The top 3.5% of loss-makers, which represents about 4 lakh traders, logged an average loss of ₹28 lakh each over the same period, including transaction costs.

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In contrast, only 1% of individual traders managed to earn a profit exceeding ₹1 lakh after accounting for transaction costs.

The study also found that proprietary traders and foreign portfolio investors (FPIs) in FY24 recorded gross trading profits of ₹33,000 crore and ₹28,000 crore, respectively, before considering transaction costs.

Interestingly, the majority of the profits were generated by larger entities that utilised trading algorithms, with 97% of FPI profits and 96% of proprietary trader profits originating from algorithmic trading.

Despite successive years of losses, over 75% of the loss-making traders persisted in trading in F&O, the study found.

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