Why do F&O traders keep losing? SEBI’s study of trading habits, explained
SEBI’s companion study looks past profit and loss at how traders actually behave: what they trade, how much capital they use, how often they trade and what they do after a loss. The habits turn out to predict the results.
Habit check: how often did traders like you lose money in FY26?
How do you mostly trade?
Peak margin you use
Your share trading, compared with your F&O trading
Years in a row you have traded F&O
Each dial shows the share of loss-makers among SEBI’s traders with that one habit. Dials are separate findings, not a combined score.
Play 20 quarters as a typical F&O trader
SEBI looked at 4.02 crore trader-quarters. 15.4% ended in profit, with a median gain of ₹4,366. The other 84.6% ended in a loss, with a median loss of ₹10,525. Press play to draw 20 quarters at those odds.
Winning quarters0
Losing quarters0
Running total₹0
Expected after 20 quartersabout −₹1.65 lakh
A simple illustration we built from SEBI’s medians. Real results vary from trader to trader.
Eight habits SEBI found in the data
SEBI used trade data from the 15 largest brokers (78.6 lakh traders in FY26) and a random sample of about 5,000 traders to study margin and strategy.
- 1
Nearly everyone buys options. 93% of traders only bought options and another 4% mostly did. Only about 2% mainly sold options.
- 2
Option buying loses most often. 89.9% of pure option buyers lost money in FY26, and half lost more than the peak margin they used.
- 3
Small capital, huge turnover. 77% used under ₹1 lakh of margin. Over a fifth traded ₹10 lakh to ₹1 crore a year on ₹10,000 to ₹1 lakh, and 94 to 98% of them lost.
- 4
More trading, more losing. Traders active on over 100 days were 42% of traders but took 87% of losses.
- 5
Experience does not help. Loss-makers rise from 91% in year one to 96.5% after four straight years.
- 6
Losses are bigger than wins. The median losing quarter (₹10,525) was more than twice the median winning one (₹4,366).
- 7
Investors lose less. Traders who also traded shares heavily lost less often and much less money.
- 8
Losses rarely turn into wealth. 77% of loss-makers now hold shares worth less than a quarter of what they lost.
Option buyers lose more often; sellers lose bigger
SEBI grouped traders by what they did on most trading days. Figures come from its random sample of about 5,000 traders.
Only options buyers
93% of traders
Average result per trader: −₹1,27,934
Mostly options buyers
4.2% of traders
Average result per trader: −₹4,63,048
Mostly futures traders
0.9% of traders
Average result per trader: −₹1,66,519
Mostly options sellers
2.1% of traders
Average result per trader: −₹51,70,985
The seller trap: option sellers had the fewest loss-makers, but the ones who lost averaged about ₹51.7 lakh each in FY26, more than 11 times a losing “mostly buyer”. Selling options gives frequent small wins and rare, very large losses.
Small accounts, very busy fingers
SEBI used each trader’s peak margin as a measure of the capital they really put to work, and counted the days they traded.
Who uses how much capital
Under ₹1 lakh peak margin (77% of traders)
Their share of turnover
Their share of losses
Small accounts lose very often (90%) but small amounts: about ₹44,000 each. The 23% using more than ₹1 lakh lose less often (81%) but took 86% of all losses, about ₹9.2 lakh each.
Trading on more than 100 days a year
Share of traders
Share of turnover
Share of losses
Average loss: ₹2.76 lakh for traders active on more than 100 days, against ₹0.22 lakh for everyone else. Large-turnover traders traded on 126 days a year on average; small ones on 5.
The over-leverage zone
More than one in five traders turned over ₹10 lakh to ₹1 crore in a year while using only ₹10,000 to ₹1 lakh of margin. 94 to 98% of them lost money. SEBI’s rule of thumb: at the same capital, more turnover means more losers; at the same turnover, more capital means fewer.
The young and the small trade their portfolio many times over
Trading intensity is F&O turnover divided by the value of the shares a trader owns. Higher numbers mean more trading on a thinner base.
By age
Under-30s traded about 93 times their portfolio, and about 89% of them lost money.
By yearly income
Intensity falls from 75x for incomes under ₹5 lakh to 14x above ₹1 crore.
Practice does not make profit here
SEBI followed the same traders across years. The longer people kept trading without a break, the more likely they were to be losing.
Loss-makers by years traded in a row
Bars start at 80% so the rise is visible. Among traders who lost in both of the previous two years, 90 to 92% lost again the next year.
The five-year test
Among the 13.25 lakh traders active in all five years, the steady losers lost about ₹13.8 lakh each. The rare steady winners made about ₹66.5 lakh each, which shows how few and how different they are.
Chance of making a profit in FY25 to FY26, by past result (FY22 to FY24)
Big past winners kept winning about half the time. Of traders who had lost more than ₹10 lakh, over 95% lost again.
People quit after a loss, then many return
Every quarter, roughly a third of traders stopped trading for at least that quarter. Almost all of them had just lost money.
Traders who paused each quarter, and how many had a loss just before
The loss right before quitting was typically 2.2 times the trader’s average profit in earlier winning quarters. For the worst 10%, it was over 30 times.
First-time traders still trading later
By cohort: FY25 newcomers after 1 year, FY24 after 2, and so on. Roughly a third stick with F&O for years.
Who keeps going
Only 57% of FY25 traders came back in FY26, against a long-run average of 65%. But traders with big results, either way, kept going: about 88% of those with cumulative profits or losses above ₹10 lakh continued, against 53 to 55% of those with small results.
Traders who also own shares lose much less
Each row groups traders by how much they traded in shares compared with F&O in FY26, showing average result per trader and share of loss-makers.
The average loss falls from about ₹2.07 lakh to about ₹15,000 as share trading grows. About 18.6 lakh traders (roughly one in four) traded only F&O in FY26, up from under 1 lakh before COVID.
Losing F&O often means leaving investing too: of FY22 traders who later quit F&O, 58% had also stopped trading shares by FY26.
Change the habits, change the odds
SEBI’s conclusion is that results track behaviour more than experience. The good news: behaviour is something you control.
- 1Buy fewer lottery tickets
Only-buyers had a median return of −114% on the margin they used. If you buy options, size each trade so a full loss of the premium is affordable.
- 2Trade less, plan more
Turnover, not time, drove the losses. Set a maximum number of trades a week and write the reason for each one before you place it.
- 3Own the market before you rent it
Traders who also invested in shares lost less often and far less. Build a long-term portfolio first, then use derivatives for specific purposes.
- 4Stop after a bad month
Losses that come just before people quit are often double their usual profits. A monthly loss limit protects your capital and your judgement.
Build trading habits that last
Our courses in New Delhi teach position sizing, trade planning and journaling on live markets, before any F&O strategy. Start with our free trading journal, then ask about the next batch and fees.
Frequently asked questions
Short answers based on the SEBI report.
What does SEBI’s FY25-FY26 trading behaviour study say?
It looks at how individuals trade F&O, not just whether they win. 97% mainly buy options, most use small capital but trade it many times over, losses grow with trading intensity, and experience does not help: the share of loss-makers rises from 91% in the first year to over 96% after four years in a row.
Do option buyers or option sellers lose more?
In SEBI’s FY26 sample, 89.9% of traders who only bought options lost money, against 43.8% of those who mainly sold options. But sellers who lost, lost far more: about ₹51.7 lakh on average, more than 11 times a losing option buyer.
Does trading experience reduce F&O losses?
Not in SEBI’s data. Among traders who kept trading year after year, the share of loss-makers rose from 91% after one year to 96.5% after four. Of traders active every year from FY22 to FY26, only 0.5% made a profit in all five years.
Does trading more often lead to bigger losses?
Yes, on average. Traders active on more than 100 days a year were 42% of traders but took 87% of losses, losing ₹2.76 lakh each on average against ₹0.22 lakh for those who traded 100 days or fewer.
Do traders who also invest in shares do better in F&O?
Somewhat. Traders whose share trading was more than five times their F&O trading had 84% loss-makers and an average loss of about ₹15,450, compared with 90% and about ₹2.07 lakh for traders whose share trading was under a tenth of their F&O trading.
Why do traders keep trading F&O after losing?
SEBI found that 86 to 89% of traders who paused had lost money in the previous quarter, and many came back. Traders with large past losses also kept trading at high rates, and more than 95% of those who lost over ₹10 lakh in FY22 to FY24 lost again in FY25 to FY26.
Where can I download the original SEBI report?
Use the “Download the original SEBI report” button on this page. It opens the 53-page PDF on SEBI’s website.
Read the full SEBI report
“Study: Trading Behaviour of Individual Traders in the Equity Derivatives Segment (FY25-FY26)”, Securities and Exchange Board of India, August 2026. 53 pages, PDF.
How SEBI measured this
Population figures use trade data from the 15 largest brokers by individual F&O turnover (78.6 lakh of 87.7 lakh traders in FY26). Strategy and capital findings use a random sample of 5,050 traders whose loss-maker share (88.1%) closely matches the population (87.7%). Capital employed is the trader’s peak margin during the year. Trading intensity is F&O turnover divided by equity portfolio value. Results are net of transaction costs. SEBI describes associations, not cause and effect. The 20-quarter game on this page is our own illustration using SEBI’s median quarterly gain and loss.
This page is an independent, educational summary written by 9AM Traders Academy. It is not affiliated with or endorsed by SEBI. All figures come from the SEBI report linked above; anything we calculated is labelled as ours. Nothing here is investment advice. Trading in derivatives carries a high risk of loss. Read the companion pages: SEBI’s FY26 F&O profitability study and SEBI’s 2025 study on F&O and cash market growth.