The the decline in aggregate losses did not translate into lower losses for the average trader
The Securities and Exchange Board of India’s (SEBI’s) measures to curb excessive speculation in equity derivatives have coincided with a sharp cooling in retail participation, with the number of active individual traders falling for the first time since FY16. But despite fewer traders, individual investors still incurred net losses of ₹91,685 crore in FY26, while the average loss per trader increased.
The number of active individual traders in the equity derivatives segment fell by 20 per cent to 78.6 lakh in FY26 from 98.1 lakh in FY25, according to SEBI’s latest study. This was the first year-on-year decline in the trader base since FY16. Aggregate net losses fell by 18 per cent to ₹91,685 crore from a revised ₹1.12 lakh crore in FY25.
However, the decline in aggregate losses did not translate into lower losses for the average trader. Average net loss per trader rose by 2.4 per cent to ₹1.17 lakh from ₹1.14 lakh in FY25. Nearly nine out of 10 individual traders continued to lose money, although the proportion of loss-makers fell to 87.7 percent from 90.9 per cent.
“The decline in aggregate losses came alongside a 20 per cent fall in the number of active traders and an overall moderation in trading activity in FY26. However, losses fell proportionately less than participation did, showing that losses remained substantial among the traders who stayed active,” SEBI said in the report.
Nearly 46 lakh traders who participated in FY25 did not trade in FY26, compared with 26 lakh exits in FY25, while new entrants fell by about 40 per cent to 20.8 lakh from 34.3 lakh.
At the same time, those who remained active increased their trading intensity in options. Average turnover per options trader rose by 10.8 per cent between Q2 and Q4 FY25, while average turnover per index-options trader increased by 12.3 per cent.
The shift comes after the markets regulator introduced a series of measures from November 2024 to curb excessive speculation. These included restricting weekly derivative contracts to one index per exchange, raising the minimum contract size, requiring upfront collection of option premiums, withdrawing calendar-spread benefits on expiry day and increasing extreme-loss margins for short options positions.
The report found that participation declined more sharply after the measures, particularly in options. Between Q2 and Q4 of FY25, unique derivatives traders fell by 25.4 per cent, while options participation declined 25.8 per cent and index-options participation fell by 26.8 per cent.
The cooling in activity was also not sustained, as the average daily turnover in index options fell by 17.4 per cent after the November 2024 measures, but recovered to ₹81,696 crore in the October 2025-March 2026, which was 38 per cent above the initial post-measures period.
Options continued to account for 92 per cent of individual traders’ aggregate losses in FY26, with about 23 per cent of traders accounting for nearly 90 per cent of total losses.
Published on August 20, 2026
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