The Securities and Exchange Board of India has published two analytical reports examining individual investor participation, behaviors, and financial results within the equity derivatives segment. Conducted by the regulatory body’s Department of Economic and Policy Analysis, the research evaluates client-level transactions, demographic details, transaction expenses, and trading patterns across the market.
Investor Profitability and Financial Outcomes
According to the findings, active individual traders decreased by approximately 20 percent, falling from 98.1 lakh in the 2025 financial year to 78.6 lakh in the 2026 financial year. Concurrently, new market entrants saw a reduction of about 40 percent. Total net losses among individual participants decreased to around Rs 91,685 crore during the 2026 financial year, compared to approximately Rs 1.12 lakh crore in the preceding financial year. Despite this reduction in aggregate losses, 87.7 percent of individual traders continued to experience financial losses.
The research indicates that the average loss per individual trader rose marginally to roughly Rs 1.17 lakh in the 2026 financial year. Approximately 92 percent of the cumulative losses sustained by individuals originated from options trading activities. Furthermore, individual participants shouldered transaction costs amounting to about Rs 25,000 crore during the same period, bringing cumulative transaction expenses over the 2022 to 2026 financial years to approximately Rs 1 lakh crore.
Trading Behaviors and Market Concentration
The analytical review highlighted distinct behavioral patterns among retail participants, noting that trading activity remained heavily skewed toward options buying:
- Nearly 97 percent of individual traders predominantly utilized option-buying strategies.
- Only around 2 percent of participants were classified as options sellers, who formed the primary group recording positive median returns on capital employed.
- Approximately 59 percent of index options turnover occurred in contracts expiring on the same day, with 75 percent expiring within one day and 97 percent within one week.
- Roughly 35 percent of individual traders held no equity holdings, while nearly 78 percent maintained equity portfolios valued below Rs 1 lakh.
Institutional Profits and Comparative Performance
While individual participants recorded widespread losses, institutional and proprietary participants reported substantial gross trading profits. Proprietary traders registered the highest gross trading profit at approximately Rs 44,000 crore, followed by foreign portfolio investors at Rs 14,000 crore, corporates at Rs 8,000 crore, mutual funds at Rs 3,000 crore, and partnership firms or limited liability partnerships at Rs 3,000 crore. The regulatory body noted that 99 percent of the profits generated by foreign portfolio investors and proprietary entities were achieved through algorithmic trading structures.
Primary source: This independent news summary is based on official information from Securities and Exchange Board of India. Read the original document for complete details.