SEBI reports 90% loss rate among retail options traders

Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey reported that 90% of retail traders in the options market continue to incur losses. According to SEBI studies for fiscal years 2025 and 2026, nearly 97% of traders primarily use options-buying strategies, while only about 2% are options sellers. The data indicates that losses are persistent; approximately 90% of traders who lost money in two consecutive years also incurred losses in the following year.

Pandey noted that younger investors, lower-income groups, and those with smaller equity portfolios show higher trading intensity relative to their financial resources. Furthermore, increased trading experience in equity derivatives does not appear to correlate with improved profitability.

In response to these trends, SEBI is considering easing margin requirements for certain long-tenure futures and options (F&O) products to improve market access. The regulator aims to balance investor protection with market development, emphasizing that ease of doing business and investor protection are not competing objectives. Proposed measures include a standardized, colour-coded credit risk-o-meter for debt securities and a review of the Accredited Investor Framework to support sophisticated investors.