A new behavioural view of India's retail derivatives market
On 20 August 2026, SEBI released two studies examining individual participation in the equity-derivatives segment: one focused on trading behaviour and the other on profitability. The behavioural study looks beyond a simple profit-or-loss number and examines strategy choice, trading intensity, capital employed, experience and persistence.
That makes it useful as a market-structure case study. It helps answer a more important question than “who made money?”: how are individual traders actually participating, and where is risk concentrating?
Options buying is not a niche behaviour. It is the dominant retail strategy.
The most striking finding is not merely the loss rate. It is the concentration of participation. SEBI classified 93% of the behavioural-study sample as “Only Options Buyers”, with another 4% as “Majorly Options Buyers”. In other words, the overwhelming majority of the sampled traders participated predominantly through options buying.
Within the same study material, Only Options Buyers showed a loss incidence close to 90%. SEBI also highlighted that options-buying strategies accounted for a large share of aggregate losses in the strategy comparison.
This does not mean “option buying is inherently wrong”. It means that a strategy used by an exceptionally large share of individual traders is also associated, in SEBI's FY26 sample, with a very high incidence of loss. That deserves attention to trade selection, frequency, sizing, execution and exit discipline — not a simplistic conclusion about one instrument.
Lower loss incidence for sellers does not mean lower risk.
SEBI's comparison also shows why the study should not be reduced to “buyers lose, sellers win”. Traders classified as Majorly Options Sellers had the lowest loss incidence among the strategy groups shown, at about 43.8% in FY26.
But the losses were much larger when sellers did lose. SEBI's reported average loss among loss-making Majorly Options Sellers was about ₹51.7 lakh, compared with about ₹4.6 lakh for loss-making Majorly Options Buyers. The two strategies therefore expose traders to different shapes of risk.
Options buying can produce repeated premium losses and high loss frequency. Options selling may produce a lower frequency of loss while retaining the possibility of very large adverse outcomes. Probability of loss and magnitude of loss are separate dimensions.
What the data suggests about the real problem
For TradeBoTicks, the useful insight is not that retail traders need a different instrument. The stronger lesson is that a leveraged market punishes inconsistent process. A trader may have a valid market view and still produce poor outcomes through excessive participation, weak position sizing, delayed exits or repeated discretionary decisions.
When a trader is continuously watching the market, activity can be mistaken for opportunity. More decisions also create more places for inconsistency.
Position size, premium paid, leverage and maximum exposure can matter as much as directional accuracy.
Stop-loss logic, exit conditions, slippage, liquidity and order handling determine how the idea becomes an actual result.
Predefined conditions reduce the number of decisions that must be made while money and emotion are already involved.
How to interpret these findings
SEBI’s study provides strong evidence about the observed behaviour and aggregate outcomes of individual traders in the equity derivatives market.
The findings show that options buying dominates retail participation and that a very high proportion of options buyers experienced losses during the period studied.
These are population-level observations. They do not explain the cause of every individual trader’s outcome, nor do they suggest that losses are unavoidable for every participant.
For TradeBoTicks, the important takeaway is not that a particular trading strategy is inherently good or bad. It is that how traders participate — including trade selection, frequency, exposure, risk controls and execution discipline — matters significantly.
Systematic trading can bring predefined rules and consistency to these decisions, but it does not remove market risk or guarantee profitable outcomes.
What systematic trading changes — and what it cannot change
A systematic process cannot remove market risk. What it can do is make the trader's decision process more explicit and repeatable.
This shifts the objective from “find more trades” toward “participate only when predefined conditions are met”. It reduces discretionary decisions, but it does not eliminate losing trades, gaps, slippage, liquidity risk, technical failure or changing market regimes.
The objective of technology should not be to help a trader trade more. It should help them trade more systematically.
The TradeBoTicks view
SEBI's FY25–FY26 research reinforces the reason we focus on research, validation, risk rules and controlled execution rather than prediction promises. The scale of options participation means the better question is not necessarily how to move retail traders into a completely different style of trading. It is how to make participation more selective, measurable and risk-aware.
That principle also informs why we built OptionTurtle: to translate predefined research, risk and execution logic into a simpler user experience while leaving the broker account and capital with the user. It is a product implementation of a systematic process — not a claim that losses can be eliminated.
Primary sources
This research note is based primarily on SEBI material released on 20 August 2026. Readers should review the original studies for methodology, definitions, sample construction and complete findings.
- SEBI — Trading Behaviour of Individual Traders in the Equity Derivatives Segment (FY25–FY26) ↗
- SEBI — Profitability of Individual Traders in the Equity Derivatives Segment (FY25–FY26) ↗
- SEBI Press Release No. 50/2026 — key trends in participation, behaviour and profitability ↗
Editorial disclosure: TradeBoTicks is not affiliated with SEBI. This page is an independent educational interpretation of publicly released research and should not be treated as investment advice, a performance claim or a guarantee of trading outcomes.