91 pc individual traders incurred losses in equity derivatives in 2024-25, finds SEBI study

MUMBAI: Nearly 91 per cent of individual traders incurred net loss in Equity Derivatives Segment (EDS) at the aggregate level, in the recently concluded financial year 2024-25, a SEBI analysis of profit and loss of such traders suggests. A similar trend was observed in 2023-24 too.

This SEBI analysis comes after certain media reports claimed that investor losses had started to reduce, after the markets regulator had, on October 1, 2024, introduced some measures to strengthen the equity index derivatives framework.

Markets regulator SEBI has analysed the trading activity of all investors and individual investors, for the period December 2024 to May 2025, to present the factual impact of measures to strengthen the equity index derivatives framework introduced in October 1, 2024.

The SEBI said index options turnover, year on year, is down by 9 per cent (in premium terms) and 29 per cent (in notional terms). However, compared to the level two years ago, index options volume is up by 14 per cent (in premium terms) and 42 per cent (in notional terms). Turnover of individuals in premium terms in EDS is down by 11 per cent year on year and up by 36 per cent over the similar period two years ago.

The number of unique individual investors trading in EDS is down by 20 per cent compared to the previous year and up by 24 per cent from two years ago. “India continues to see a relatively very high level of trading in EDS, compared to other markets, particularly in index options”, SEBI said.

The financial year-wise trend for a six-year period (2019-20 – 2024-25) along with analysis of profit and loss of individual traders in EDS is covered in the full study carried out by SEBI. Finding that a majority of individual traders are making losses in EDS, SEBI reassured, “Trends in turnover of index options will continue to be observed from the perspective of ensuring investor protection and market stability.”

In order to ensure that the rapid growth in the derivatives market matches with commensurate risk monitoring metrics, SEBI had on May 29, 2025, introduced certain measures with key objectives: better monitoring and disclosure of risks in derivatives; and reducing instances of spurious ban periods for derivatives on single stocks. (ANI)