Why are losses still so high despite SEBI’s new measures? It’s interesting to see that two-year growth in trader participation is positive despite YoY declines.
Despite SEBI’s recent regulatory measures, retail investor losses in India’s equity derivatives market remain significant. A SEBI study for FY 2024–25 revealed that 91% of individual traders incurred net losses, totaling ₹1.05 lakh crore - a 41% increase from the previous year. This trend underscores the persistent risks associated with leveraged instruments like futures and options.
SEBI has introduced several reforms to mitigate these risks, including rationalizing weekly index derivative contracts, standardizing expiry days, increasing minimum contract sizes, mandating upfront collection of option premiums, removing calendar spread margin benefits, and monitoring position limits intraday. Despite these efforts, trading volumes remain elevated, indicating continued participation in derivatives markets.
These trends underscore the need for enhanced investor awareness and prudent risk management practices. Trading in derivatives involves substantial risk and may not be suitable for all investors.
Source: SEBI study, NISM
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Yeah, that’s the reality. Many traders underestimate how quickly leverage can turn against them it’s not just about strategy, but discipline and risk control. not many realize that even small daily losses in options can compound fast. The data just makes it clear how risky it can get.
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