Nearly nine out of ten individual traders in the equity derivatives segment incurred losses in the financial year 2025-26, even as aggregate losses declined from the previous year, according to a study released by the Securities and Exchange Board of India.

As per the study, 87.7 percent of individual traders incurred losses during FY26, while their aggregate net losses were at around Rs 91,685 crore, compared with approximately Rs 1.12 lakh crore in FY25. “Despite lower aggregate losses, 87.7% of individual traders continued to incur losses during FY26,” the study stated.

The number of active individual traders also declined by about 20 percent, from 98.1 lakh in FY25 to 78.6 lakh in FY26.

The average loss per trader increased marginally to around Rs 1.17 lakh during FY26, the study said. Individual traders also incurred transaction costs of around Rs 25,000 crore during the year, taking cumulative transaction costs over FY22-FY26 to approximately Rs 1 lakh crore. Options trading accounted for around 92 percent of the aggregate losses incurred by individual traders.

The findings also highlighted a strong link between trading intensity and losses. Higher turnover relative to capital employed or equity portfolio was associated with higher loss rates, while younger investors, lower-income groups and traders with relatively small equity portfolios showed substantially higher trading intensity relative to their financial resources.

Analysts believe the decline in aggregate losses should not be interpreted as a sharp improvement in retail profitability. Lower participation and reduced trading activity contributed to the moderation, while the high proportion of loss-making traders underscores the risks of frequent derivatives trading. They say investors need greater risk awareness and discipline. However experts warn that transaction costs can materially erode returns, particularly for high-frequency traders, and say investors should assess leverage, trading frequency and risk capacity before entering equity derivatives.

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