Trading app gamification in India gets blamed for a lot. The confetti, the streaks, the leaderboards. But there is a number that makes the design argument almost beside the point. SEBI has now measured individual equity derivatives traders for four straight years, and the share who lose money has not moved: 90.2% in FY22, 91.7% in FY23, 91.1% in FY24, 91.0% in FY25. Over the same four years the number of traders more than doubled, from 42.7 lakh to 96 lakh. Net losses across those four years add up to Rs 2,86,986 crore. Every figure here comes from SEBI’s own study, published July 2025.
The trading app gamification critique is popular because it is easy to picture. A green tick. A tiny animation when the order fills. A streak counter that makes you open the app on a day you had no reason to trade.
It is a real critique. It is also the wrong place to look first, because it argues about the packaging while the contents sit in plain sight in a regulator’s PDF.
So here is the contents.
The crowd more than doubled. The loss rate did not move.
Individual traders in the equity derivatives segment, and the share who lost money, FY22 to FY25
Source: SEBI, Comparative study of growth in Equity Derivatives Segment vis-a-vis Cash Market after recent measures, published July 2025, Table 11. Bars show the number of individual traders in lakhs; the percentage on each bar is the share of those traders who made a net loss that year.
What does SEBI actually say about individual F&O losses?
That nine in ten people lose, and that this has been true every year it has looked.
SEBI published its Comparative study of growth in Equity Derivatives Segment vis-a-vis Cash Market after recent measures in July 2025. It covered the top 13 stock brokers in the segment. Their combined client base was around 96 lakh unique traders, against roughly 107 lakh market-wide. So this is most of the market, not a sample.
The headline sentence is flat and devastating: “nearly 91% of individual traders incurred net loss in EDS in FY 2025”.
The table underneath is the part worth memorising. Net losses widened 41% to Rs 1,05,603 crore in FY25, from Rs 74,812 crore in FY24, after transaction costs. Average loss per person was Rs 1,10,069.
Now read the loss-maker column down the years. 90.2%. 91.7%. 91.1%. 91.0%.
Four years. Four different market conditions. A regulator intervening in the middle of it. And the failure rate lands within one and a half percentage points of itself every single time.
A failure rate that holds at 91% through four different years is not a market outcome. It is a property of the game.
Why is a stable 91% worse than a rising one?
Because stability is what a designed system looks like.
A number that bounces around tells you the outcome depends on conditions. Bull year, better; bad year, worse. That is a market.
A number that holds at 91% through four different years tells you the outcome depends on the structure. The structure did not change, so the outcome did not change. Everything else about Indian retail investing changed in that window, and this did not.
That is the honest version of the casino comparison, and it does not need a single animation to make the case. A casino does not care about conditions either. The house edge is a property of the game, published in advance, stable by construction.
The difference is that a casino tells you the odds.
So what actually grew?
The crowd. Only the crowd.
Traders in the segment went from 42.7 lakh in FY22 to 96 lakh in FY25. That is roughly 2.25 times the number of people. The loss rate stayed put.
So the growth of those four years amounts to one thing: the same outcome distribution, applied to more people.
That is the sentence to sit with. The failure rate is fixed. The user base doubled. So every marketing rupee spent on acquisition is, statistically, a recruitment cost for the losing side.
Which is part of why Zerodha’s refusal to run ads reads differently once you have seen this table. Whatever the reasoning behind it, a broker that does not buy users is not paying that particular cost.
We have watched this shape before in Indian consumer finance. CRED built game mechanics into a rewards layer and the engagement worked exactly as designed. Dream11 scaled a real-money category on the same engine. The mechanics are proven. Their being proven is the problem.
Did SEBI’s crackdown fix it?
It shrank the room. It did not change the game.
SEBI introduced a set of measures by circular dated 1 October 2024, phased in over that year and the next:
- weekly index derivatives products rationalised, from 20 November 2024;
- higher tail risk coverage on options expiry day, from 20 November 2024;
- bigger minimum contract sizes for index derivatives, from 2 January 2025;
- option premium collected upfront from buyers, from 10 February 2025;
- calendar spread treatment removed on expiry day, from 10 February 2025;
- intraday monitoring of position limits, from 1 April 2025.
A further circular on 29 May 2025 tightened risk metrics again.
These were serious, and they worked on the thing they targeted. Over December 2024 to May 2025, unique traders in the segment fell 20% year on year, from about 84.25 lakh to about 67.74 lakh. Index options turnover fell 9% in premium terms and 29% in notional terms.
The smallest accounts left fastest. Traders with turnover under Rs 10,000 dropped 30% year on year.
And the loss rate? It went from 91.1% to 91.0%.
Read those two facts together, because that is the whole article. Roughly 16 lakh fewer people traded, the smallest accounts thinned the most, and the proportion who lost money was unchanged to within a rounding error.
The intervention worked as harm reduction. Fewer people were exposed. Nobody who stayed got better odds.
Where did SEBI draw the line on the game layer?
At the point where the product stopped pretending to be a market.
On 4 November 2024, SEBI issued an advisory titled “Advisory on unauthorized virtual trading / gaming platforms”, press release number 37/2024. It warned the public against apps offering virtual trading, paper trading or fantasy games built on the real-time price data of listed companies.
As Khaitan & Co noted in its analysis, SEBI’s position was that such activities contravene the Securities Contracts (Regulation) Act, 1956 and the SEBI Act, 1992. This is the sharpest line any Indian regulator has drawn around trading app gamification.
Note what the regulator objected to. Not risk. Not losses. The simulation. A product that used real market data to run a game, without the obligations that come with being a market.
That is a coherent line, and it is worth noticing where it leaves everything on the licensed side of it. A registered broker with a slick app is not running a fantasy game. It is running the real thing, where the documented outcome is that 91% of participants lose.
Is India unusual here, or is this just derivatives?
Unusual, and by a distance that is hard to read as ordinary.
The same SEBI study cites World Federation of Exchanges data for March 2025. On number of contracts traded, the Indian exchange held the top position globally, with average traded contracts more than 4.3 times higher than the second-ranked exchange.
Not 4.3% higher. More than 4.3 times.
SEBI’s own phrasing in the study is that “India continues to see relatively very high level of trading in EDS, compared to other markets, particularly in index options”.
A country does not arrive at 4.3 times the next exchange by accident. It does not get there because Indians are uniquely reckless either. It gets there because a set of products became very easy to reach, very cheap to enter, and very pleasant to use.
That last clause is where trading app gamification earns its place in the story. It is the distribution mechanism, not the original sin.
THE TELL
SEBI’s curbs worked on the thing they targeted. Unique traders in the segment fell 20% year on year, and the smallest accounts left fastest, down 30%. The share of traders who lost money went from 91.1% to 91.0%. The rules thinned the crowd and left the outcome exactly where it was.
What should a marketer take from trading app gamification?
That “engagement” is not a neutral metric when the underlying product has a fixed failure rate.
Most growth teams get handed engagement as a goal and mechanics as a toolkit. Streaks, notifications, progress indicators, social proof. In a category where the product works for most users, those tools are fine and often genuinely useful. Swiggy runs the same playbook on food delivery, and the worst case there is dinner you did not need.
In a category where SEBI has measured a 91% loss rate for four consecutive years, the same tools do something else. They increase the frequency and duration of exposure to an outcome distribution that has never improved. The mechanic is identical. The consequence is not.
None of this is illegal, and this piece alleges no wrongdoing by any company. Licensed brokers operate lawfully. They display the risk disclosures the regulator requires. They are not responsible for the arithmetic of derivatives.
That is the point. The 91% is not a scandal hiding in someone’s compliance file. It is published, annual and stable. And it has not slowed the category down for four years.
The uncomfortable question for anyone building in this space is not whether the confetti is manipulative. It is simpler than that. If your growth chart goes up and the loss rate does not go down, what exactly did you grow?
FAQ
What percentage of Indian F&O traders lose money?
About 91%, and it has barely moved in four years. SEBI’s study published in July 2025 found that nearly 91% of individual traders in the equity derivatives segment made a net loss in FY25. The same measure was 91.1% in FY24, 91.7% in FY23 and 90.2% in FY22. The study covered the top 13 brokers, a combined base of around 96 lakh unique traders.
How much money did Indian retail traders lose in FY25?
Net losses of individual traders in the equity derivatives segment reached Rs 1,05,603 crore in FY25, up 41% from Rs 74,812 crore in FY24, after accounting for transaction costs. That works out to an average loss of Rs 1,10,069 per trader. Adding the four years FY22 to FY25 from the same SEBI table gives Rs 2,86,986 crore.
Did SEBI’s F&O curbs work?
They reduced participation without changing outcomes. After measures introduced by SEBI’s circular of 1 October 2024, unique traders in the segment fell 20% year on year over December 2024 to May 2025, and accounts with turnover under Rs 10,000 fell 30%. Index options turnover fell 9% in premium terms. The share of traders losing money went from 91.1% to 91.0%.
Is gamification in trading apps illegal in India?
Not as such, but SEBI has acted against the game layer when it sits outside the regulated market. Its advisory of 4 November 2024, press release 37/2024, warned the public against platforms offering virtual trading, paper trading or fantasy games built on real-time price data of listed companies. Licensed brokers running their own apps are a separate matter and operate lawfully under existing rules and risk disclosures.
Why does India trade so many derivatives contracts?
SEBI’s study cites World Federation of Exchanges data for March 2025 showing the Indian exchange in the top position globally by number of contracts traded, with average traded contracts more than 4.3 times higher than the second-ranked exchange. SEBI’s own wording is that India “continues to see relatively very high level of trading in EDS, compared to other markets, particularly in index options”.
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Sources: SEBI, Comparative study of growth in Equity Derivatives Segment vis-a-vis Cash Market after recent measures, published July 2025 (full study PDF). Every loss figure, trader count, loss-maker percentage, turnover change, contract-size and circular date, and the World Federation of Exchanges March 2025 comparison in this piece is taken from that study, including Table 11 (annual profits and losses of individual traders, FY22 to FY25) and Table 8 (breakup of unique traders by traded value). The four-year total of Rs 2,86,986 crore and the 2.25 times figure are arithmetic on Table 11, disclosed as such. The earlier SEBI study referenced in that document was published 23 September 2024. The virtual-trading advisory is SEBI press release 37/2024, Advisory on unauthorized virtual trading / gaming platforms, dated 4 November 2024; its operative position on the Securities Contracts (Regulation) Act, 1956 and the SEBI Act, 1992 is as summarised by Khaitan & Co. This piece is analysis and opinion, names no company as having broken any rule, and is not investment advice.
This article is independent analysis and opinion based on the Securities and Exchange Board of India’s own published research, specifically the Comparative study of growth in Equity Derivatives Segment vis-a-vis Cash Market after recent measures, published July 2025, and SEBI press release 37/2024 dated 4 November 2024. All figures are as reported by SEBI. Nothing here alleges wrongdoing by any company named or linked. Operating a licensed broking platform, designing an engaging app and advertising a lawful financial product are all legal activities. Views are our own and offered as fair comment on a matter of public interest. This is not investment advice.
