The average trader lost ₹1.1 lakh in F&O in FY25. Here's why

Although the number of traders dropped from Q1 to Q4, losses widened. Check out the full data and a few reasons why the house always wins.

The promise of fast profits keeps pulling retail investors into the equity derivatives segment (EDS), but the numbers tell a rather painful story.

A recent SEBI-backed study covering 96 lakh unique traders from the top 13 brokers has found that 91 per cent of individual traders lost money in the last financial year — almost identical to last year’s 91.1 per cent loss rate. But the scale of loss has ballooned.

In FY25, net losses hit Rs 1,05,603 crore, up 41 per cent from Rs 74,812 crore in FY24. That’s Rs 30,000 crore more gone in just one year.

Let’s put that in perspective: if you divide the total net loss by the number of traders, the average per-person loss comes to a painful Rs 1.1 lakh — more than a month's salary for most Indians.

The trend of pain

Here’s how the average trader has fared over the last four years, as per SEBI:

Despite the growing awareness, the number of people entering the space kept increasing, until SEBI’s November 2024 regulatory interventions.

SEBI intervention

SEBI’s derivatives risk measures, implemented in November 2024, seem to have started cooling down retail enthusiasm.

• The number of traders dropped from 61.4 lakh in Q1 to 42.7 lakh in Q4
• The average loss per trader reduced slightly from Rs 62,975 in Q3 to Rs 57,920 in Q4
• But losses still remained painfully high

So while there’s some early sign of damage control, the data makes one thing clear: retail traders are still overwhelmingly on the losing side.

Why are traders losing so much?

Because equity derivatives are not designed for retail investors looking to “make a quick buck”. Here's why:

• They’re high-risk instruments, often used by institutional investors to hedge risk. Derivatives like Futures and Options were originally designed for large institutions — mutual funds, hedge funds or FIIs — to protect their portfolios. For example, if a fund manager fears a market crash, they might use derivatives to offset potential losses.

But when a retail trader uses the same tools to “bet” on market direction, without a cushion of diversified investments, the losses can be brutal. It’s like borrowing a Formula 1 car to drive through city traffic. Fast, dangerous but not meant for city traffic.

• Derivatives allow you to trade with much more money than you actually have, a concept called leverage. For instance, with just Rs 10,000, you might take a large position. If the market moves in your favour, you win. But if it falls, you can lose everything.
• Most traders don’t have access to real-time data, algos or market-moving information
• And finally, transaction costs and taxes eat into whatever tiny profits a trader might make.

Even seasoned traders will tell you that it’s easier to make a fortune slowly than to trade your way into it.

Our take

Retail investors should treat this as a wake-up call. The illusion of quick money from trading derivatives is just that — an illusion.

If you're serious about growing your wealth, stick to long-term investing through mutual funds or direct equity, where research, discipline, and time work in your favour.

The data is clear: 91 per cent of traders lose money. Don’t bet on being the lucky 9 per cent.

Also read: Retail investors and the derivatives trap

 

This article was originally published on July 08, 2025.