What SEBI’s FY26 derivatives study says about intensity, persistence and loss

Evidence frame

This note reads SEBI’s August 2026 press release and trading-behaviour study together. Several strategy and capital observations use a random sample of about 5,050 traders, while broader profitability observations use top-broker data covering roughly 90% of individual traders. Associations in the study do not establish causation.

What happened

• SEBI released two Department of Economic and Policy Analysis studies on August 20, 2026: one on individual-trader profitability and another on trading behaviour in the equity derivatives segment during FY25 and FY26.
• The regulator reported that active individual traders declined from 98.1 lakh in FY25 to 78.6 lakh in FY26. Aggregate net losses fell to about ₹91,685 crore, but 87.7% of individual traders still incurred losses in FY26.

Key facts

• In the study’s strategy sample, 97% of traders predominantly bought options: 93% were classified as only-options buyers and another 4% as majorly-options buyers.
• About 77% of sampled traders used peak margin below ₹1 lakh. They represented 8% of turnover and 14% of losses; the remaining 23% represented 92% of turnover and 86% of losses.
• Traders active for more than 100 days represented 42% of traders, 94% of turnover and 87% of total losses in the study’s trading-intensity analysis.
• Among continuing traders who had lost money in each of the preceding two years, 90–92% incurred a loss again in the subsequent year.
• Among traders active throughout FY22–FY26, 0.5% were profitable in all five years while 65.6% incurred losses in every year.

Why it matters

• The useful signal is behavioural rather than predictive. The study links greater trading intensity, high turnover relative to capital or portfolio size, and persistent participation with weaker observed outcomes across several cuts of the data.
• That evidence is more informative when read with its denominator and sample. A high loss rate does not prove that one behaviour caused an individual outcome, and the study’s random strategy sample is different from its broader top-broker profitability dataset.

What remains unknown

• The study identifies associations; it does not establish that trading frequency, age, capital or portfolio size caused the reported outcome.
• Its portfolio analysis does not measure total household wealth, other financial assets or liabilities.
• The studies do not forecast future market returns or provide a conclusion about any listed security.

Evidence checklist

• Separate the broad profitability dataset from the smaller strategy and margin sample.
• Compare turnover with both capital employed and the underlying equity portfolio.
• Read loss frequency together with average loss size; they move differently across capital and strategy groups.
• Treat the evidence as an investor-behaviour record—not a trading strategy or market forecast.

Primary sources

1. SEBI — Press Release 50/2026: key trends in retail equity-derivatives participation and outcomes Issued 2026-08-20
2. SEBI — Trading Behaviour of Individual Traders in the Equity Derivatives Segment (FY25–FY26) Issued 2026-08-20