A new SEBI study has revealed the sharp risks in India’s futures and options market. Nearly 90% of retail options buyers lost money in FY26. Their average loss was ₹1.28 lakh. Most of them were only options buyers and their median return on capital employed was –114%.
The study also examined options sellers. Loss incidence was lower at 43.8% compared to buyers. However, when sellers lost, the damage was far deeper. Their average loss was ₹51.7 lakh, which is more than 11 times higher than the average loss of buyers.
This contrast highlights the different risk profiles. Buyers face a high probability of losing due to time decay and unfavourable price movements. Sellers face lower chances of losing but when markets move sharply against them, the downside risk becomes catastrophic.
The findings underline the dangers of leverage in derivatives trading. Many retail investors enter the market with the belief of quick profits but the data shows otherwise. SEBI’s report is a clear warning that futures and options trading requires deep understanding and caution.
