93% of F&O Traders Lose Money: Why Equity Investment Is the Smarter Choice

In September 2024, SEBI released a study that shook the Indian trading community. The numbers were damning: 93% of individual traders who traded Futures and Options (F&O) between FY22 and FY24 lost money. Not 50%. Not 70%. Ninety-three percent.

Let that sink in. For every 100 people who walked into the F&O market hoping to make quick money, 93 walked out with lighter wallets.

The Numbers SEBI Does Not Want You to Ignore

Here are the verified facts from SEBI's official studies:

• 1.13 crore (11.3 million) individual traders participated in F&O markets between FY22 and FY24.
• 93% of them lost money — that is over 1.05 crore people.
• The aggregate loss was Rs 1.81 lakh crore over three years. That is more than the annual GDP of several small countries.
• In FY25, losses surged 41% year-on-year to Rs 1.06 lakh crore — in a single year.
• 91% of F&O traders lost money in FY25 alone.
• Among the 7% who made profits, the average profit was only about Rs 2 lakh per year — barely enough to justify the risk and time.

Indian Youth and the F&O Gambling Problem

Perhaps the most alarming finding from SEBI's data: 43% of F&O traders are under 30 years old. And 76% earn less than Rs 5 lakh per year.

Young Indians, many in the early stages of their careers, are being drawn into F&O trading by social media influencers showing screenshots of overnight profits. What these influencers do not show is the other side — the 93% who lost money, the empty savings accounts, the credit card debts taken to fund margin requirements.

F&O trading, for most retail participants, is not investing. It is speculation. And SEBI's data shows it is speculation that overwhelmingly results in losses. When 97% of institutional profits in F&O come from algorithmic trading, individual traders with their phones and gut feelings are simply outgunned.

The Equity Alternative: Slow, Boring, and Profitable

While F&O traders were collectively losing Rs 1.81 lakh crore, what was the equity market doing?

• The Nifty 50 has delivered a CAGR of approximately 12.6% over 10 years and 15.23% over 20 years.
• If you had invested Rs 1 lakh in the Nifty 50 twenty years ago, it would be worth approximately Rs 20 lakh today — a 20x return.
• In the same period, gold returned about 13.6x, and fixed deposits returned roughly 4-5x.
• There has never been a 15-year period in the Sensex's history where equity returns were negative. Not during 2008, not during COVID, not ever.

Equity investing is not exciting. It does not give you the adrenaline rush of watching a Nifty options contract expire in the money. But it works. Consistently, predictably, over time.

Why Strategy Matters More Than Speed

The difference between successful equity investors and the 93% who lose in F&O comes down to one thing: strategy backed by data.

A well-built equity screener helps you find stocks with genuine technical strength. A reliable backtest tells you whether that strength has been consistent. Combined, they give you a systematic approach to building wealth — not gambling on weekly expiries.

This is exactly what BacktestKit was built for. Not to help you time the next Nifty expiry, but to help you build, test, and refine equity strategies that you can trust. Because in the long run, the tortoise beats the hare. The data proves it.

What Should You Do Instead?

1. Start with equity: If you are new to markets, begin with equity investment. Learn how companies work, how technical indicators function, and how market cycles behave.
2. Build a screener: Instead of buying random stocks based on tips, create a systematic screener that finds stocks meeting your criteria.
3. Backtest your strategy: Before committing capital, test your screener against historical data. BacktestKit lets you do this for free.
4. Start small: Even with a tested strategy, start with small positions. Build confidence with real results before scaling up.
5. Think in years, not minutes: The best equity investors think in terms of months and years. F&O traders think in hours and minutes. Choose which mindset leads to wealth.

Frequently Asked Questions

Is F&O trading always a bad idea?

Not necessarily — for experienced traders with proper risk management and algorithmic systems, F&O can serve legitimate hedging purposes. But for the vast majority of retail traders, especially those starting out, SEBI's data clearly shows it results in losses. If you are not consistently profitable in equity first, moving to F&O is like running before you can walk.

Can equity investing really beat F&O returns?

Over any meaningful time period (5+ years), disciplined equity investing has historically outperformed what the average F&O trader achieves. The Nifty 50 alone has compounded at 12-15% annually. A well-screened portfolio of quality stocks can do even better. And you do not risk losing 93% of your capital.

How do I start screening for equity stocks?

Start simple. Use BacktestKit to build a basic screener — perhaps stocks with RSI above 50 and price above the 200-day SMA. Backtest it. See how it performs. Gradually add conditions and refine your approach based on real data, not guesswork.