SEBI study: 93% of futures and options investors face significant losses

Approximately 93 per APP 10 individual traders in the equity futures and options (F&O) segment, continue to incur significant losses, a new study by the Securities and Exchange Board of India (SEBI) has revealed.

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Despite consecutive years of losses, more than 75 per cent of loss-making traders continued trading in F&O.

The aggregate losses of individual traders exceeded Rs 1.8 lakh crore over the three-year period between 2021-22 and 2023-24, according to the study.

F&O, which stands for Futures and Options, refers to financial derivatives that allow traders to speculate on asset price movements without owning the asset itself. The underlying asset can range from stocks, bonds, commodities, and currencies to indices, exchange rates, or even interest rates.

India's financial market regulator SEBI has expressed concern over speculative activities in the derivatives segment, which go against the original purpose of these asset categories.