{
  "id": 2281948,
  "title": "Retail traders pay ₹25k cr for the privilege to lose",
  "url": "https://urgent.news/2026/08/20/retail-traders-pay-25k-cr-for-the-privilege-to-lose",
  "topic": "business",
  "section": "Business",
  "published": "2026-08-20T15:55:56.000Z",
  "source": {
    "name": "The Economic Times",
    "slug": "the-economic-times",
    "url": "https://economictimes.indiatimes.com/markets/stocks/news/fo-trading-bill-retail-traders-pay-rs-25000-crore-transaction-costs-in-fy26-despite-big-losses/articleshow/133382436.cms"
  },
  "original_language": "en",
  "account": "Retail traders in equity derivatives paid approximately ₹25,000 crore in transaction costs during the fiscal year 2026 while enduring losses, as revealed by a new Sebi study. Roughly 88% of individual traders ended up losing money during FY26, with aggregate net losses for these traders amounting to around Rs 91,685 crore, a decrease from the previous year's Rs 1.12 lakh crore. However, the reduction in total losses coincided with a decline in the number of active traders, which fell by about 20% to 78.6 lakh in FY26 from 98.1 lakh in FY25. New entrants to the market also dropped by roughly 40%, indicating a cooling trend in retail participation in futures and options.\n\nThe high transaction costs placed additional pressure on small traders. Individually, traders paid around ₹25,000 crore in transaction costs in FY26, and over the period from FY22 to FY26, these costs totaled approximately ₹1 lakh crore. Sebi noted that while derivatives premium turnover moderated in FY26, total transaction costs remained relatively unchanged due to an increase in the Securities Transaction Tax from October 1, 2024. This phenomenon suggests that despite reduced trading activity, individual traders continued to incur significant costs.\n\nOptions trading was identified as the primary source of retail losses, accounting for about 92% of the aggregate losses incurred by individual traders. Futures trading, on the other hand, saw a slight decline in participation, with traders opting for options more frequently, making up 6.6% of the total, down from 6.7% in the previous year. The study highlighted that trading activity was heavily concentrated around expiry, with 59% of index options turnover occurring from contracts expiring on the same day, 75% from contracts expiring within one day, and 97% from contracts expiring within one week. This concentration reflects the allure of quick gains from small capital, but also highlights the rapid value loss associated with these near-expiry options.\n\nFurther analysis by Sebi indicated that 97% of individual traders primarily employed option-buying strategies, while only around 2% were primarily options sellers. Of note, only the latter group managed to achieve positive median returns on capital employed in FY26. Additionally, the data revealed that small investors faced disproportionately higher losses; roughly 35% of individual derivatives traders had no equity holdings, and nearly 78% had equity portfolios below Rs 1 lakh. Traders with equity portfolios below Rs 1 lakh were responsible for about 70% of the aggregate losses, despite contributing only half of the turnover.",
  "summary": null,
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}