₹24,800 crore bill: How transaction costs are eating into retail derivatives trading

Individual traders in India's equity derivatives segment incurred around ₹24,800 crore in transaction costs in FY26, even as the number of active traders declined, according to SEBI's detailed study on the profits and losses of individual traders.

The cost burden remained substantial despite a moderation in participation, with the average transaction cost per trader increasing from ₹26,027 in FY25 to ₹31,628 in FY26.

The increase in per-trader costs came against a sharp decline in individual participation. SEBI found that the number of active individual traders fell in FY26, but the transaction-cost burden did not decline proportionately.

The data suggests that while fewer individuals remained active in the equity derivatives segment, the costs incurred by those who continued trading increased on a per-trader basis.

SEBI's study covers transaction costs including brokerage, securities transaction tax (STT), exchange transaction charges, GST and other applicable charges.

STT becomes a larger component

The composition of transaction costs has also changed significantly over the years. STT accounted for 27% of total transaction costs in FY26, compared with 13% in FY22.

STT collections from individual equity derivatives traders increased from ₹1,291 crore in FY22 to ₹6,645 crore in FY26. Brokerage remained the largest component, although its share declined from 52% in FY22 to 44% in FY26.

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Loss-makers bear a heavier cost burden

The study found that transaction costs have a greater impact on traders who ultimately lose money.

In FY26, transaction costs represented 35% of the gross losses of loss-making traders, compared with 21% of the gross profits generated by profit-makers.

The burden on loss-makers has fluctuated over the past three years. Transaction costs accounted for 27% of gross losses in FY24, increased sharply to 44% in FY25 and then moderated to 35% in FY26. For profit-makers, the corresponding share remained between 18% and 23% during FY24-FY26.

Costs can change the final outcome

SEBI also examined how transaction costs affect traders who are profitable before costs are deducted.

In FY26, approximately 4.4 lakh individual traders who had gross profits became net loss-makers after transaction costs. This was lower than the roughly 5.3 lakh traders affected in FY25.

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According to the study, these traders represented around 5-6% of net loss-makers, showing that transaction costs can materially alter the final profitability outcome for a sizeable group of participants.

The findings come against a broader backdrop of persistent retail losses. SEBI found that 87.7% of individual equity derivatives traders incurred net losses in FY26, while aggregate net losses stood at ₹91,685 crore.

The study therefore highlights not only the scale of losses in retail derivatives trading, but also the significant cost incurred by participants simply through trading activity, with the burden becoming particularly consequential for those already operating at a loss.

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