India reports 18% drop in retail option trader losses after regulations

India’s retail options traders collectively lost $9.61 billion in the fiscal year ending March 2026. That sounds terrible until you learn it’s actually an improvement.

Aggregate losses in the equity futures and options segment fell 18% year-over-year to ₹916.85 billion, according to data the Indian government presented during a parliamentary session around August 11. The decline marks the first observed drop in retail F&O losses after years of relentless escalation, a shift driven largely by regulatory guardrails that the Securities and Exchange Board of India began installing in late 2024.

The numbers tell two stories

The headline figure, an 18% decline in total retail losses, looks like a win for regulators. But peel back one layer and the picture gets more complicated.

The number of individual traders participating in equity derivatives dropped 20%, falling to 7.86 million from 9.81 million the prior year.

The less encouraging part: average loss per remaining retail trader actually ticked up. It rose to ₹116,654 from ₹113,913 in the previous fiscal year.

Total F&O turnover also declined, dropping to ₹202 trillion from ₹213 trillion.

What SEBI actually did

The Securities and Exchange Board of India didn’t take a subtle approach. Starting in late 2024, SEBI rolled out a series of measures specifically designed to make speculative derivatives trading harder for retail investors.

The regulator restricted weekly derivatives expiries, a move that eliminated many of the short-dated contracts retail traders had been using for speculative wagers on index movements. SEBI also raised minimum contract sizes, which effectively priced out smaller traders who had been entering positions with relatively tiny amounts of capital. On top of that, margin requirements went up, meaning traders needed to put more money down to open the same positions.

The regulatory push came after years of alarming data. Over the three fiscal years leading up to FY24, retail investors accumulated cumulative net losses exceeding ₹1.81 trillion in equity derivatives. Prior studies had found that more than 90% of retail F&O traders were losing money.

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