Net losses of individual traders in F&O widened in FY25: Sebi study

A recent study by the Securities and Exchange Board of India (Sebi) has highlighted a significant increase in net losses among individual traders dealing in the equity derivatives segment for the fiscal year 2025. The report reveals a striking 41% rise in these losses compared to previous years, shedding light on the financial challenges faced by individual investors in this complex market. This trend underscores the need for enhanced risk management strategies and more robust investor education to help traders navigate the volatile landscape of futures and options (F&O). The study further indicates that over 91% of individual traders in the F&O segment experienced net losses during this period. This overwhelming majority suggests that despite the allure of high returns, many traders are struggling to achieve profitability. The findings raise questions about the accessibility and understanding of derivatives trading, prompting calls for regulatory bodies to implement measures that could protect individual investors and promote more informed trading practices. In response to these findings, market analysts are urging for increased public awareness and educational initiatives focused on the risks associated with derivatives trading. Sebi's study serves as a crucial reminder of the complexities inherent in the F&O market and the potential financial impact on individual traders. As the market continues to evolve, stakeholders emphasize the importance of equipping traders with the necessary tools and knowledge to make informed decisions and minimize potential losses.

— Authored by Next24 Live