Over 9 out of 10 individual traders (93 per cent) in the equity futures and options (F&O) segment continue to incur significant losses. The aggregate losses of individual traders exceeded Rs 1.8 lakh crore over the three-year period between FY22 and FY24, according to the latest analysis conducted by markets regulator Sebi.

“Top 3.5 per cent of loss-makers, approximately 4 lakh traders, faced an average loss of Rs 28 lakh per person over the same period, inclusive of transaction costs,” according to the Sebi study.

Only 1 per cent of individual traders managed to earn profits exceeding ₹1 lakh, after adjusting for transaction costs, it said.

Over 75 per cent of individual F&O traders in FY24 had declared an annual income of less than Rs 5 lakh, it said.

However, proprietary traders and foreign portfolio investors made profits in the F&O segment.

“In contrast to individual traders, proprietary traders and foreign portfolio investors (FPIs) as a class booked gross trading profits of Rs 33,000 crore and Rs 28,000 crore, respectively, in FY24 (before accounting for transaction costs). Against this, Individuals and others incurred a loss of over Rs 61,000 crore in FY24 (before accounting for transaction costs),” Sebi added.

Most of the profits were generated by larger entities that used trading algorithms, with 97% of FPI profits and 96% of proprietary trader profits coming from algorithmic trading, it said.

On an average, individual traders spent Rs 26,000 per person on F&O transaction costs in FY24.

“Over the three-year period from FY22 to FY24, individuals collectively spent about Rs 50,000 crore on transaction costs, with 51 per cent of these costs being brokerage fees and 20 per cent being exchange fees,” Sebi said.