89% Of Young F&O Traders Lose Money, Finds Sebi Study

Young investors are increasingly participating in India’s futures and options (F&O) market, but a large majority continue to lose money, according to a Sebi study. Traders below 30 accounted for 43% of individual traders in FY26, up from 31% in FY22.

According to a report by Mint citing Sebi data, around 89% of traders under 30 reported losses in FY26, the highest among all age groups. By comparison, 81% of traders above 60 lost money.

The study also highlighted the significant participation of lower-income investors. Nearly three-fourths of individual derivatives traders reported annual incomes below ₹5 lakh. This group accounted for 43% of turnover but 53% of total losses.

Individual traders' aggregate net losses declined 18% year-on-year to ₹91,685 crore in FY26 from ₹1.12 lakh crore in FY25. However, their cumulative losses over the five years through FY26 reached nearly ₹3.85 lakh crore. The average loss per trader also increased to about ₹1.17 lakh from ₹1.14 lakh.

Options remain the biggest source of retail losses

Equity options accounted for 92% of individual traders' aggregate losses in FY26. Nearly 88% of individual options traders lost money, compared with around 66% among futures traders.

Retail participation has also spread beyond India's largest cities, with investors outside the top 30 cities accounting for roughly two-thirds of individual traders and nearly half of derivatives turnover.

The study found that retail investors continue to favour extremely short-duration options. Although Sebi's measures reduced expiry-day trading, 59% of index-options turnover in FY26 still occurred on the expiry day, while 75% was concentrated within one day of expiry.

Only 3% of turnover involved contracts with more than seven days remaining, underscoring the high-risk nature of short-term options trading.