The results of the Securities and Exchange Board of India's interventions in the futures and options (F&O) market are beginning to show.
The total number of unique traders in the F&O segment has declined by 20 per cent to 6.7 million, according to a study released by Sebi. This count is for the period between December 2024 and May 2025, compared to the same period a year ago.
Meanwhile, individual investors' turnover in equity derivatives has dropped by 11 per cent to 56,000 crore, compared to 62,700 crore during the same period a year earlier. Traders with a total turnover of less than 10 lakh experienced a steeper decline. In contrast, those with trading volumes between 1 crore and 10 crore saw the least decline, at 4 per cent.
While individual investors have hit the brakes on their derivatives bets, their net losses have widened by 41 per cent to 1.1 lakh (average per person) in 2024-2025 (FY25), up from 86,728 in 2023-2024.
An analysis of profit and loss at the aggregate level showed that nearly 91 per cent of individual traders in the derivatives segment incurred a net loss in FY25. The mounting losses may also have contributed to the drop in investor count.
This is the third such study by the market regulator, prompted by concerns over the profitability of retail traders and the growing frenzy in the F&O market. Regulatory officials have consistently cautioned investors about the high risks and stakes in derivatives trading. The recent changes to the F&O market took effect from November 2024. Minimum contract sizes for weekly index derivatives were increased in January, followed by a similar hike for monthly index derivatives in February.
-- Khushboo Tiwari, Business Standard