A new study by the Securities and Exchange Board of India (Sebi) has found that more than 91 per cent, or 73 lakh, individual traders lost money in the futures & option (F&O) segment in 2023-24.

On an average, the net losses stood at ₹1.2 lakh per person.

The study followed up on a report published by Sebi in January 2023, which found that 89 per cent of individual equity F&O traders lost money in 2021-22.

With increased participation of individual investors in equity and equity derivatives markets, the latest study was undertaken to analyse profit and loss patterns for individual traders in F&O during the three years 2021-22 to 2023-24, and for all the categories of investors in F&O during 2023-24.

The study found that 93 per cent of over 1 crore individual F&O traders incurred average losses of about ₹2 lakh per trader (inclusive of transaction costs) during the three years from 2021-22 to 2023-24. The aggregate losses of such traders exceeded ₹1.8 lakh crore during the period.

In 2023-24 alone, individuals incurred about ₹75,000 crore in net losses.

According to the Sebi study, the top 3.5 per cent of loss makers — about 4 lakh traders — faced an average loss of ₹28 lakh per person over the same period, inclusive of transaction costs.

On the other end, only 7.2 per cent of individual F&O traders made a profit over the three-year period.

Further, only 1 per cent of individual traders managed to earn profits exceeding ₹1 lakh, after adjusting for transaction costs.

"The availability of sophisticated trading platforms and lower transaction costs have enabled retail investors to actively trade in options and futures contracts, contributing to the surge in market liquidity," Sebi said.

Sebi said the rapid growth in F&O trading has highlighted the need for investor education and risk management practices as a significant proportion of retail traders continued to incur losses.