With reference to individual equity F&O trading in India, consider the following statements: 1. SEBI reported that 93 per cent of individual equity F&O traders incurred losses between FY22 and FY24. 2. Muhurat trading is the tradition of purchasing stocks during Diwali festivities. 3. The study conducted by SEBI covers the period from FY20 to FY22. Which of the statements given above is/are correct?

SEBI study finds 93 per cent of individual equity F&O traders incurred losses

GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims + Mains· 8 November 2026

Retail investor protection and market volatility: a key GS3 and Ethics case study on financial literacy.

Why in news

SEBI released a study revealing that 93 per cent of individual equity Futures and Options (F&O) traders incurred losses between FY22 and FY24.

Background

The Securities and Exchange Board of India (SEBI) conducted a study on individual equity F&O traders. The study covers the period from FY22 to FY24, highlighting a high loss rate among retail participants.

Facts for Prelims

BodySEBI: Securities and Exchange Board of India
Fact93 per cent of individual equity F&O traders incurred losses between FY22 and FY24
FactMuhurat trading: A tradition of purchasing stocks during Diwali festivities

Prelims practice question

With reference to individual equity F&O trading in India, consider the following statements:

SEBI reported that 93 per cent of individual equity F&O traders incurred losses between FY22 and FY24.
Muhurat trading is the tradition of purchasing stocks during Diwali festivities.
The study conducted by SEBI covers the period from FY20 to FY22.

Which of the statements given above is/are correct?

(a)2 only
(b)3 only
(c)1 and 2 only
(d)2 and 3 only

Show answer

Answer: (c) 1 and 2 only — Statements 1 and 2 are correct. Statement 3 is incorrect: The study covers the period from FY22 to FY24.

For Mains

Q. Discuss the risks associated with retail participation in complex derivative markets and suggest measures to protect individual investors from speculative losses.

Dimensions to cover in your answer

Information asymmetry: Retail traders often lack sophisticated risk-management tools compared to institutional players
Regulatory friction: Balancing investor freedom in capital markets with the need for stringent safeguards against high-leverage products

Keywords: Retail participation · Risk management · Information asymmetry · Market volatility · Investor protection

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