An Indian trader opens the broker terminal in the morning. Before the screen loads, a disclosure appears:
“Nine out of ten individual traders in equity futures and options incurred net losses”
The trader acknowledges it. Clicks Yes. Trading begins. Same. Everyday
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The number is accurate. SEBI found that 93% of individual F&O traders incurred losses over FY22 to FY24, with aggregate losses exceeding ₹1.8 lakh crore. In FY25, 90.9% were loss-makers. The latest study places the FY26 figure at 87.7%.
The disclosure has made the outcome difficult to miss. But it says nothing much about why it happened and what needs to be done.
In Conversations with retail trader, the response is usually brief: it is my capital and my decision. The warning is treated as a condition of entry, not as information that changes the next order.
That is the limitation of the 90% statistic. It describes the population. It says very little to the person looking at an order window. He is one person who is already thinking the 90% is not him.
SEBI now knows more than the disclosure communicates
SEBI's latest work goes beyond counting profitable and loss-making accounts.
Its FY25–FY26 studies show that 97% of individual traders were predominantly options buyers. In FY26, 93% traded only options. Around 90% of options buyers lost money.
The activity was also concentrated close to expiry. In FY25, 70% of index-options turnover occurred on the expiry day itself. That declined to 59% in FY26, but the preference for contracts with very little time remaining was still visible.
Frequency mattered. Traders active for more than 100 days represented 42% of traders but generated 94% of turnover and 87% of losses.
Capital and turnover were frequently out of balance. Traders with equity portfolios below ₹1 lakh and derivatives turnover above ₹1 crore represented 13% of traders but accounted for 52% of aggregate losses.
The result of a profitable quarter was also smaller than the damage from a losing one. SEBI found a median quarterly loss of ₹10,525, against a median gain of ₹4,366 in profitable quarters.
These are not explanations of every individual loss, and they do not establish causation. They do, however, identify the behaviour around which losses were concentrated:
● repeated trading;
● short-duration options;
● turnover disproportionate to available capital;
● and losses that were larger than gains.
None of this appears in the warning the trader acknowledges.
The warning is detached from the next decision
A population-level statistic does not tell a trader whether today's position is too large for the account, whether turnover has risen after a loss, or whether the trader is repeatedly buying contracts with only a few hours left to expiry.
It does not show the trader's average gain against the average loss. It does not show transaction costs accumulated during the month. It does not say whether trading frequency has increased while results have deteriorated.
The warning therefore remains external to the decision.
The trader does not see “your average loss is twice your average gain.” The trader sees “nine out of ten traders lose.”
The first statement concerns the account. The second concerns everybody else.
The information gap continues inside the terminal
The gap begins before the order is placed.
Most retail terminals are built to make execution easy. They show price, a set of indicators and a few levels of market depth. Indicators such as RSI, MACD and moving averages reorganise prices that have already traded. They can describe momentum or trend, but they do not show how the current move is being built.
Market depth has a different limitation. It displays orders resting in the book at that moment. Those orders can be changed or withdrawn before execution. The screen shows stated intent, not completed participation.
An executed trade leaves a firmer record. Volume at each price, buying executed at the offer, selling executed at the bid, absorption of repeated orders and the ability—or inability—of price to move after that activity reveal the structure forming inside the session.
A trader may be buying because price has crossed an indicator or the last candle has closed above a level. The missing information is whether that breakout attracted fresh buying, whether large sell orders absorbed it, and whether price found acceptance above the level. The same problem exists on the other side: a trader may sell a breakdown while executed buying is absorbing the supply below it.
The terminal has confirmed the price move. It has not shown the trader how that move was produced.
This is where the information gap becomes a positioning gap. The trader does not know whether the order is aligned with the participation already visible in the session or placed directly against it. Large executed volume does not identify the participant, but it does show where meaningful size entered, where it was absorbed and which side succeeded in moving price.
The question is therefore larger than whether the trader had access to a chart. It is what the chart allowed the trader to see.
SEBI's studies measure product choice, trading frequency, turnover, capital and eventual profit or loss. They do not examine the information available immediately before each order. They cannot distinguish between two traders who bought the same option on the same day when one traded from a defined structure and the other reacted to a price signal after the move had already developed.
That is a significant part of the “why” that the loss statistic still does not capture.
From disclosure to diagnosis
The 90% figure should remain. It is an important statement of risk.
But a warning about the population does not improve the quality of the next decision. Diagnosis has to move closer to the trade itself.
Part of that diagnosis can come from the account:
● derivatives turnover relative to capital;
● concentration of trades near expiry;
● trading frequency following a loss;
● average loss against average gain;
● and the effect of transaction costs on the final result.
The other part concerns how the decision was made.
Did the entry follow a price indicator derived from completed candles, or a structure that was still developing? Was price being accepted above the entry level or repeatedly rejected? Did executed volume support the move? Was aggressive buying moving price higher, or being absorbed by available supply? Was the trader buying into sustained selling or selling into sustained buying?
These questions do not tell a trader what position to take. They establish the conditions under which the position was taken.
That is the subtle change the disclosure misses. The trader does not need another message saying that trading is risky. The trader needs a clearer view of personal trading behaviour, the structure of the session and the participation against which the order is being placed.
The present disclosure records the outcome of the population and asks for an acknowledgement.
A useful diagnosis would help the trader understand the account, the trade and the other side of that trade before the next order is placed.
This story is authored by Shai Coelho, founder of Vtrender Technologies, an NSE- and BSE-authorised market-data vendor.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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