'SEBI must reveal names of Big Players': Rahul Gandhi demands regulatory action for those profiting from retail investors' Rs 1.8 lakh crore losses via F&O trading

Senior Congress leader Rahul Gandhi, on Tuesday, September 24, called on the Securities and Exchange Board of India (SEBI) to disclose the identities of the ‘big players’ profiting at the expense of small retail investors. His statement comes amid growing tensions between the Congress party and SEBI, with the opposition frequently targeting SEBI Chairperson Madhabi Puri Buch over alleged corruption. Gandhi took to social media platform X (formerly Twitter) to voice his concerns, alleging that small investors have collectively lost a staggering Rs 1.8 lakh crore in just three years through 'uncontrolled F&O trading.'

“Uncontrolled F&O trading has grown 45 times in five years. Ninety percent of small investors have lost ₹1.8 lakh crore in the past three years. SEBI must reveal the names of the so-called ‘Big Players’ who are making a killing at their expense,” Gandhi, who serves as the Leader of the Opposition in the Lok Sabha, posted on X.

SEBI Study 

Gandhi’s remarks follow the findings of a recent SEBI study, which painted a grim picture of the state of retail participation in Futures & Options (F&O) trading. 

A recent study by the regulator, released on Monday, revealed that over 91% of individual traders—approximately 73 lakh—suffered financial losses in the Futures & Options (F&O) segment during FY24, with each trader losing an average of Rs 1.2 lakh.

The findings further highlighted that 93% of more than one crore F&O traders experienced losses averaging Rs 2 lakh per person (including transaction costs) over a three-year period from FY22 to FY24.

In total, the combined losses of these traders surpassed Rs 1.8 lakh crore, underscoring the significant financial risks faced by retail investors in F&O trading.

The study further revealed that the top 3.5% of loss-making traders, roughly 4 lakh individuals, faced particularly heavy losses, averaging Rs 28 lakh per person, including transaction fees.

SEBI Calls for Greater Investor Awareness

SEBI in its study had acknowledged that the rise in F&O trading has been driven by the proliferation of user-friendly trading platforms and reduced transaction costs, which have attracted more retail investors into the market. However, this rapid growth has also underscored the need for improved investor education and better risk management practices. 

"While retail participation has boosted market liquidity, the scale of losses among small investors is alarming and highlights the need for more robust investor protection mechanisms," SEBI had stated. The regulator stressed that greater awareness is essential to help retail traders better understand the risks associated with F&O trading, where potential rewards are often overshadowed by significant financial pitfalls.