Retail Investor Losses In F&O Segment Fall 18% To ₹91,685 Cr In FY26

Losses incurred by retail investors in India's equity derivatives market declined nearly 18% year-on-year to ₹91,685 crore ($9.61 billion) in the financial year ended March 2026, according to data presented by the government in Parliament on Tuesday.

The number of individual investors trading in equity derivatives fell by close to a fifth to 78.60 lakh during the year, the government said, attributing the decline to a series of regulatory measures introduced by the Securities and Exchange Board of India (SEBI) over the past 18 months to curb speculative activity in the segment. Both retail trading volumes and overall turnover in equity derivatives, comprising futures and options, also declined in FY26 compared to the previous year, Minister of State for Finance Pankaj Chaudhary said in a written reply to the Rajya Sabha.

"Following the regulatory measures, SEBI has observed a year-on-year decline in the number of unique individual investors from 98.10 lakh to 78.60 lakh and net losses of the individuals from ₹1,11,788 crore to ₹91,685 crore in the equity derivatives segment in 2025-26, compared to the previous year," Chaudhary said.

Losses Persist Despite Decline

India is home to more than 130 million retail traders and has the largest equity derivatives market in the world by volume. A SEBI study found that nine out of ten retail traders in the segment made losses on average. According to the regulator's analysis, retail investors have collectively lost money in the derivatives segment in each of the last five financial years, with losses peaking at ₹1.12 lakh crore in FY25 before easing in FY26.

The average loss per individual investor, however, rose during the period, increasing to ₹1,16,654 from ₹1,13,913. Overall equity derivatives turnover also fell, dropping to ₹202 lakh crore in FY26 from ₹213 lakh crore in FY25.

The minister listed several steps taken by SEBI since November 2024 that contributed to the decline in retail participation, losses and trading volumes in the segment. These included rationalising weekly index derivatives products, increasing tail risk coverage on options expiry days, raising contract sizes for index derivatives, rationalising monthly index derivative products, collecting option premiums upfront from buyers, removing calendar spread treatment on expiry days and introducing intraday monitoring of position limits.

In May 2025, SEBI introduced additional measures to streamline expiry days for various derivative contracts across exchanges and implement risk metrics for better monitoring and disclosure of risks in the F&O segment.