New Delhi: The number of investors losing money in futures and options (F&O) trading is increasing continuously. According to a report by market regulator- Securities and Exchange Board of India (SEBI), in the last three years, 93 percent of traders lost Rs 1.8 lakh crore in futures and options. Last year also SEBI had released a similar report, then it was found that in the financial year 2022, 89 percent of individuals had lost money in equity F&O trading.

Average loss is Rs 2 lakh

SEBI's recent study shows that more than 1 crore individuals trade in the F&O segment. Out of these, 93% incurred losses in three financial years. Their average loss was around Rs 2 lakh. This also includes transaction costs. Out of these 93%, there are 3.5% i.e. around 4 lakh traders whose average loss was Rs 28 lakh. If we talk about profits, then only 1% of traders were successful in earning a profit of more than Rs 1 lakh.

Trading despite continuous losses

Most of the traders who suffer losses in F&O trading are low-income. SEBI's study shows that about 75 percent of the individuals in F&O trading were those whose income was less than Rs 5 lakh in FY 2023-24. Also, 75 traders continue F&O trading despite continuous losses. If seen in terms of age, the number of young people under the age of 30 trading in the F&O segment jumped from 31 percent in FY 2023 to 43 percent in FY 2024.

Who is making money from F&O

While individual traders are going bankrupt in F&O trading, proprietary traders and foreign portfolio investors (FIIs) are printing money heavily. In the financial year 2023-24, proprietary traders made a gross trading profit of Rs 33 thousand crore and FIIs Rs 28 thousand crore. Most of these profits have been earned by large entities, which used trading algorithms. 97 percent of FPI profits and 96 percent of proprietary trader profits have come from algorithmic trading.