Sebi study says individual investors down 20 percent in F&O trading, 91 percent still losing money

Sebi study says individual investors down 20 percent in F&O

Market regulator Sebi’s efforts to curb the Futures & Options (F&O) frenzy have shown some positive results. A Sebi study shows that individual investors in F&O have declined and losses have also widened. The Sebi study says still 9 out of 10 individuals are incurring losses in F&O trades. Sebi has done this study to assess the impact of its steps taken last year.

Sebi, in a study published on Monday, said the number of unique individual investors trading in F&O is down by 20 percent compared to the previous year, but it’s up by 24 percent compared to two years ago. In the study, it is seen that traders with total turnover less than Rs 1 lakh witnessed the highest degrowth compared to the previous year. The same bucket witnessed the highest increase in unique investors in F&O compared to two years ago.

The study indicates that the net losses of individual traders widened by 41 percent to Rs 1,05,603 crore in FY25 from Rs 74,812 crore in FY24, after accounting for transaction costs. The percentage of traders making losses in F&O remained broadly unchanged at 91 percent from the earlier study done by Sebi.

The study also found that the turnover of individuals in premium terms in F&O is down by 11 percent year-on-year, but up by 36 percent over a similar period two years ago. During the study period of December 2024 to May 2025, the average daily traded value by individual investors in F&O witnessed degrowth of 11 percent when compared to the similar period in the previous year, and witnessed a growth of 36 percent over a similar period two years back.

Index options turnover, year-on-year, is down by 9 percent in premium terms and 29 percent in notional terms. However, compared to two years ago, index options volume is up by 14 percent in premium terms and 42 percent in notional terms.

The Sebi study says, during December 2024 to May 2025, average daily traded value in F&O witnessed a decline of 5 percent when compared to the similar period last year, i.e. December 2023 to May 2024. But compared to two years back, it witnessed a growth of 46 percent over a similar period two years back.

In comparison to the above, average daily traded value in the cash segment saw a degrowth of 11 percent over the similar period last year and a growth of 91 percent over a similar period two years back.

Within F&O, during the last 6 months, average daily premium traded for index options saw a degrowth of 9 percent or a degrowth of 29 percent in notional terms compared to a similar period in the previous year, and a growth of 14 percent or growth of 42 percent in notional terms compared to a similar period two years back.

The study says India continues to see a relatively very high level of trading in F&O compared to other markets, particularly in index options.

The Sebi study is based on the top 13 stock brokers in F&O with a combined client base of around 96 lakh unique traders.

Sebi was concerned with the explosion in index options trading on expiry day over time; concerns arose around investor protection and systemic stability. Accordingly, Sebi announced measures to strengthen the equity index derivatives framework. Which were made effective  from October 1, 2024, in a phased manner. Steps included  rationalization of weekly index derivatives products, increase in tail risk coverage on the day of options expiry, rationalization of monthly index derivative products, upfront collection of option premium from buyers, removal of calendar spread treatment on the expiry day, and intraday monitoring of position limits.