F&O trading bill: Retail traders pay Rs 25,000 crore transaction costs in FY26 despite big losses

Retail traders paid around Rs 25,000 crore in transaction costs while trading equity derivatives in FY26, even as most of them continued to lose money, according to a new Sebi study. The market regulator’s study showed that nearly 88% of individual traders in the equity derivatives segment incurred losses during FY26.

Aggregate net losses of individual traders stood at about Rs 91,685 crore, down from Rs 1.12 lakh crore in FY25. But the fall in total losses came alongside a drop in the number of active traders.

Active individual traders declined about 20% to 78.6 lakh in FY26 from 98.1 lakh in FY25. New entrants fell about 40%, showing that retail participation in futures and options cooled during the year. Still, the average loss per trader rose marginally to about Rs 1.17 lakh in FY26.


The transaction cost number gives another view of the pressure on small traders. Sebi said individual traders paid around Rs 25,000 crore in transaction costs in FY26. Over FY22-FY26, cumulative transaction costs paid by individuals stood at about Rs 1 lakh crore.

Also Read: Rs 91,685 crore gone! 88% retail investors lost money in F&O trading in FY26 even after strict Sebi rules

These costs include charges that traders bear while entering and exiting positions. In a market where many retail traders make repeated short-term trades, even small costs can add up quickly. Sebi said derivatives premium turnover moderated in FY26, but total transaction costs remained broadly unchanged because of the increase in Securities Transaction Tax from October 1, 2024.

This means lower trading activity did not translate into a similar fall in costs for individual traders. For loss-making traders, transaction costs made the outcome worse.

Options trading remained the main source of retail losses. Sebi said around 92% of aggregate losses incurred by individual traders came from options trading. The share of traders who traded in futures declined marginally to 6.6% from 6.7%.

The study also showed that trading remained concentrated near expiry, where contracts are cheaper and move sharply. About 59% of index options turnover came from contracts expiring on the same day. Around 75% came from contracts expiring within one day, and 97% came from contracts expiring within one week.

This concentration is important because same-day and near-expiry options attract traders looking for quick gains with small capital. But these products can lose value fast. Frequent entry and exit also raise the cost burden.

Sebi’s second study on trading behaviour found that nearly 97% of individual traders mainly followed option-buying strategies. Only around 2% were classified as mainly options sellers. Options sellers were the only strategy group to record positive median returns on capital employed in FY26.

The data also showed that small investors were hit harder. About 35% of individual derivatives traders had no equity holdings, while nearly 78% had equity portfolios below Rs 1 lakh. Traders with equity portfolios below Rs 1 lakh accounted for about 70% of aggregate losses, despite contributing only about half of turnover.