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Which Countries Have the Most Profitable Retail Traders?

Written By

William Berg

Written By

William Berg

Head Legal Analyst & Securities Law Expert

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

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Edited By

James Barra

Edited By

James Barra

Head of Content and Media Lead

James is Head of Content and a brokerage expert with a background in financial services. A former management consultant, he's worked on major operational transformation programmes at top European banks. A trusted industry name, James’ work at DayTrading.com has been cited by publications like Business Insider, and he has shared his expertise on US and UK television, plus investing podcasts.

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Fact Checked By

Tobias Robinson

Fact Checked By

Tobias Robinson

CEO and Head of Broker Testing Panel

Tobias is the CEO of DayTrading.com, an active investor, and a brokerage expert. He has over 30 years of experience in financial services, including supervising the reviews of hundreds of trading brokers, and contributing via CySEC to the regulatory response to digital options and CFD trading in Europe. Tobias' expertise make him a trusted voice in the industry, where he's been quoted in various financial organizations and outlets, including the Nasdaq.

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Updated

Sep 10, 2026

Why Retail Trader Profitability by Country Is Hard to Measure

Which country has the most profitable retail traders? This sounds like a straightforward question that should be easy to answer. It is not.

There is no global database maintained by regulators, exchanges, or brokers that ranks retail trading profitability by nationality.

We must also handle the problem that when statistics and studies do exist, they tend to measure different things, which makes comparisons difficult.

Do you want to know in which country the largest percentage of retail traders become profitable? Example: In country A, 23% of new retail traders eventually become profitable, while the number for country B is 25%.

Or do you want to know which country has the largest number of profitable retail traders? Example: Country A has 1.2 million profitable retail traders, while Country B has 3.4 million profitable retail traders.

Or maybe you are looking for information about where you can find the most profitable individual retail traders? Example: Country A has 12 retail traders who have made 10+ million USD each from retail trading, while Country B only has 2 retail traders that have passed this benchmark.

Regulators such as the UK Financial Conduct Authority, the European Securities and Markets Authority, and the US Commodity Futures Trading Commission do collect or mandate profitability disclosures at the broker account level. But the figures published normally tell us only what percentage of retail accounts at a specific brokerage firm made or lost money during a set period. They do not necessarily tell us the nationality of the person behind the account.

The fact that a broker is regulated in Country A does not automatically mean that all the traders are based in Country A. Many online retail brokers accept traders from multiple countries. In the European Economic Area (EEA), a brokerage regulated in any of the membership countries can serve traders in other EEA countries, as long as the financial services passporting rules and procedures are followed.

For instance, a retail broker regulated in Cyprus can serve customers in countries such as Germany, Italy, and France; calling its customer profitability rate a “Cyprus trader profitability rate” would be wrong. The European Securities and Markets Authority (ESMA) itself has documented how important this cross-border structure is. Its original CFD intervention decision noted that Cyprus-based providers were serving retail customers across the EU, while its latest cross border analysis found that Cyprus remained the largest home jurisdiction for firms providing passported investment services in 2024, accounting for 21% of such firms.

Academic trading studies measure something else again. Let’s for instance take a look a the research in Taiwan and Brazil, where researchers obtained transaction records covering entire markets or near complete populations of traders. These datasets allowed the researchers to follow individual trading performance across years rather than looking at a broker’s rolling 12-month window.

What we can see in both of these studies is that the answers regarding retail trading profitability become less flattering when the measurement period gets longer. A trader can finish one quarter in profit without possessing a repeatable edge. Flip a coin enough times, and somebody will call themselves a coin whisperer after six heads in a row. The important distinction is between period profitability and persistent skill. Period profitability asks whether an account ended a quarter or year above zero. Persistent skill asks whether the same trader can repeatedly generate returns after costs, with enough consistency that chance becomes an implausible explanation. Those are very different tests.

Any serious comparison also needs to state whether profits are measured before or after trading costs. Gross trading profit is what remains from price movement before commissions, spreads, financing charges, exchange costs, and other trading expenses. Net trading profit subtracts those costs. After-tax profit goes one step further and accounts for personal taxation, which varies between countries and investors and is normally outside broker profitability disclosures. A profitable broker account can still produce a smaller personal return after taxation. Because taxation depends on factors such as residency, instrument, holding period, and personal circumstances, it should not be mixed casually into international broker comparisons.

ESMA’s methodology requires CFD providers to include realised and unrealised results plus charges, fees, and commissions when calculating whether accounts lost money. The Official Journal of the European Union / EUR-Lex, Commission Delegated/ESMA decision 2018/796 specifies that an account is considered to have lost money when the sum of realised and unrealised net profits during the 12-month calculation period is negative, and that all CFD-related costs, including charges, fees and commissions, must be included. Deposits and withdrawals are excluded.

US CFTC rules use a similarly broad calculation. Under 17 CFR 5.18, registered retail forex counterparties calculate realised and unrealised gains and losses, subtract fees, commissions, and other account charges, add interest income or rebates, and exclude deposits and withdrawals.

Headline Trader Profitability Statistics

Sources:

1. United Kingdom — FCA: Contract for differences
2. European Union — ESMA: ESMA Report on Trends, Risks and Vulnerabilities
3. United States — CFTC: What Customers Should Know Before Trading Over-the-Counter Forex
4. Australia — ASIC Report 828: Risky Business: Driving change in CFD issuers’ distribution practices 
5. Taiwan — Barber, Lee, Liu & Odean: The Cross-Section of Speculator Skill: Evidence from Day Trading
6. Brazil — Chague, De-Losso & Giovannetti: Day Trading for a Living?
7. India — SEBI FY22–FY24: Study – Analysis of Profits & Losses in the Equity Derivatives Segment (FY22-FY24)

But this table should not be read as a proper country ranking regarding retail trader profitability. The products, time periods, account definitions, and trader groups differ too much. For example, the UK research is about CFDs, while the Taiwan research concerns stock day trading. The Brazilian research is limited to mini Ibovespa futures, and the Indian study concerns Indian exchange-traded equity derivatives.

Tier 1 Regulatory Data on Retail Trader Profitability

Regulatory disclosure data is a good place to begin, because it covers live trading accounts at regulated firms and uses prescribed calculation methods. Its weakness is geographic attribution. A regulator normally supervises firms and products. It does not necessarily publish trader results grouped by residency or citizenship.

United Kingdom: FCA CFD Profitability Data

The UK’s current retail CFD framework developed from European Union product intervention rules and became permanent under the FCA in 2019. The substantive retail CFD restrictions were not materially changed by Brexit, because the FCA had already finalized its own permanent UK CFD rules in July 2019.

Under the FCA’s restrictions for retail CFD trading, leverage for retail clients is capped between 1:30 and 1:2 according to the underlying asset. Major currency pairs receive the highest permitted leverage. Less liquid assets and cryptocurrencies receive much lower limits. The rules also contain a 50% margin close-out threshold, negative balance protection (NBP), and restrictions on trading incentives. Providers must publish a standardised warning showing the share of their retail accounts that lose money. The FCA’s policy is set out in [PS19/18] FCA PS19/18 on retail CFD restrictions.

Before the restrictive measures became permanent in 2019, the FCA estimated that 78% of active retail CFD accounts were loss-making. That implied approximately 22% were profitable over the relevant measurement basis. The regulator estimated retail consumers had lost £268.4 million during a three-month period from August through October 2017. That was retail consumers trading CFDs through firms operating in or from the UK, including FCA-authorised firms and incoming EEA firms.

That 78% figure should not be treated as a permanent national constant. Current provider warnings show how much results can move. At the time of initial publication:

• CMC Markets’ UK warning reports that 68% of its retail accounts lose money, implying 32% make money.
• IG’s UK risk disclosure states that 69% of retail investor accounts lose money when trading spread bets and CFDs with the provider, implying that 31% did not lose money during the relevant measurement period.
• XTB’s UK material reported a 74% loss rate, which would put profitable accounts around 26%.

Factors such as trader selection, products offered, typical position size, trading frequency, pricing, and customer demographics can move profitability figures even when the legal framework is identical. Calling the UK’s trader success rate “26%” or “32%” is therefore too neat. A better statement is that FCA data has consistently shown that most retail CFD accounts lose money, historically around three quarters or more, while individual provider figures can move meaningfully around that level.

European Union: ESMA and National Regulator Profitabiliy Data

The European Union provides some of the best historical regulatory data available because ESMA collected results from several national regulators before imposing the temporary CFD intervention measures in 2018. The original ESMA analysis found that 74% to 89% of retail CFD accounts lost money, with average losses per client ranging from €1,600 to €29,000.

The retail CFD intervention capped leverage at 1:30 for major currency pairs, 1:20 for non-major currency pairs and major indices, 1:10 for other commodities and non-major indices, 1:5 for individual equities, and 1:2 for cryptocurrencies. It also introduced mandatory negative balance protection (NBP) and margin close-out rules.

The country studies behind ESMA’s headline range are interesting.

• CySEC in Cyprus analysed around 290,000 accounts at 18 major CFD providers between January and August 2017. Approximately 76% lost money, leaving about 24% profitable.
• Spain’s CNMV found that roughly 82% lost money during a 21-month period.
• France’s AMF found that more than 89% lost money over four years.
• Ireland found loss rates around 74% to 75%.
• Italian regulator CONSOB found 78% of clients at one provider losing money on CFDs and 75% losing money on rolling spot forex during one study.
• Polish studies repeatedly produced loss rates close to 80%.

At first sight, somebody might conclude that Cypriot traders were better than French traders because 24% of the CySEC sample made money compared with around 11% in France. That would be a bad reading of the data. CySEC’s dataset was built from Cyprus-regulated providers, not a census of Cypriot nationals. This distinction matters more in Cyprus than almost anywhere else. ESMA reported that Cyprus had become a major base for cross-border CFD providers. The number of Cyprus-based firms specializing in selling CFDs to retail clients across borders increased from 103 to 138 between 2016 and 2017.

The pattern has persisted beyond CFDs. ESMA’s 2024 cross border investment services study found Cyprus was still the leading home jurisdiction for passporting firms, representing 21% of the firms examined. A German resident trading with a Cyprus investment firm contributes to that firm’s results without becoming a Cypriot trader. Regulatory domicile and trader nationality are not the same variable.

Germany Is An Example Of Why Historical Comparisons Need Context

Germany provides a useful example of how difficult it can be to compare different data sets. Before the EU-wide intervention, German industry data cited by BaFin indicated a loss rate of about 62.7%, noticeably lower than several other European studies. That sounds impressive until the methodological differences are considered.

The German figure came from industry statistics rather than the same regulator-designed sample used elsewhere. Study periods also differed. Product mixes differed. Some markets had already imposed restrictions while others had not. After ESMA standardised many retail CFD rules across Europe, those national regulatory differences narrowed. Any claim that German traders are inherently more profitable than French, Spanish, or Polish traders would therefore outrun the evidence.

The data tell us what happened to accounts in certain samples under certain conditions. It does not tell us that retail traders living in one country are more successful than retail traders in another country.

United States: CFTC and NFA Forex Profitability Data

The United States offers unusually clear OTC forex profitability reporting. CFTC regulations require registered retail forex counterparties to calculate, each calendar quarter, the percentage of non-discretionary retail forex customer accounts that were profitable and unprofitable. The calculation includes realised and unrealised gains and losses, subtracts fees, commissions and other charges, and adds interest income and rebates, while excluding customer deposits and withdrawals. Registered firms must make several years of historical percentages available to customers or prospective customers upon request.

The CFTC looked across registered OTC forex dealers for the period from Q2 2021 through Q1 2022 and summarised the result in plain English. Roughly one-third of customers made money and two thirds lost money. That suggests short-period US retail forex profitability near 33%.

But here again, provider selection matters. OANDA’s regulatory disclosure for Q2 2026 reported 34.04% profitable accounts and 65.96% unprofitable. Interactive Brokers reported 45.53% profitable retail forex accounts for the same quarter.

That is an eleven percentage point difference inside one regulatory system. The client populations are plainly not interchangeable. Interactive Brokers serves a broad multi-asset customer base and has historically attracted experienced, higher capital traders alongside ordinary retail users. Another dealer may acquire a quite different customer profile. This is one reason broker account statistics should not be promoted as national skill scores.

NFA Financial Requirements Section 12 requires Forex Dealer Members to collect a minimum security deposit of 2% of notional value for transactions involving specified major currencies and 5% for other currency transactions. These minimum deposits are equivalent to leverage ratios of 1:50 and 1:20, respectively, although individual firms may impose higher deposit requirements.

That gives US retail forex customers more maximum leverage on major currencies than EU or UK retail customers, but far less than the 1:500 or 1:1000 ratios still advertised by firms in places such as Belize and Vanuatu.

Retail CFDs are largely absent from the regulated US retail market. CFDs referencing a single security or narrow-based securities index can constitute security-based swaps under US law, bringing them within the SEC’s Title VII regulatory framework. The framework imposes significant restrictions on transactions with non-eligible-contract-participant counterparties, which makes the ordinary European-style retail CFD model unavailable in the U.S.

As a result, U.S. regulatory profitability data is much more heavily centred on spot style OTC forex rather than the broad CFD category seen in Europe.

Australia: ASIC Gives a Before and After Leverage Comparison

Australia offers valuable data because of the studies carried out before and after its retail CFD leverage rules changed materially in March 2021. Before the intervention, Australian firms could offer leverage of up to 1:500 on some retail products. ASIC’s 2017 review found that 72% of retail CFD clients lost money, while 63% of retail clients trading margin FX lost money. ASIC introduced retail leverage limits ranging from 1:30 down to 1:2, along with margin close-out rules, negative balance protection (NBP), and restrictions on inducements.

The early effects were large. During the first six months of the intervention, ASIC reported a 91% reduction in aggregate net retail losses, from an average of A$372 million per quarter to A$33 million. There were 51% fewer loss-making retail accounts per quarter, an 87% reduction in margin close-outs and an 88% fall in negative balance incidents. During the first three months, the percentage of profit making and loss-making accounts was actually close to 50:50, compared with 36% profitable and 64% loss-making in the preceding year.

That first quarter should not be treated as a new permanent success rate. Market conditions matter, and customer activity changed.

ASIC’s more recent evidence gives a better medium-term benchmark. Its 2026 REP 828 Risky Business review reported that during FY2024, 68% of retail CFD investors lost money, meaning about 32% made money. Retail losses exceeded A$458 million, including A$73 million in fees.

The most defensible interpretation is not that the regulatory changes turned losing traders into winning traders. But the changes seem to have greatly reduced the size and speed of losses. That is a different outcome.

Country-Level Trading Studies Using Exchange and Regulatory Microdata

Broker disclosures answer whether accounts made money during a particular reporting window. Academic transaction datasets can answer other questions regarding profitable trading.

While regulatory risk warnings offer rolling quarterly snapshots of brokerage client performance, they suffer from reporting opacity. They reflect only broker-level aggregations rather than trade-by-trade clearing records. To evaluate true retail edge, economists examine exchange-cleared microdata, e.g. complete datasets covering 100% of all submitted orders, fills, and account balances across entire sovereign markets over multi-year horizons.

Leading empirical studies consistently reveal that when transaction costs, market microstructure friction, and multi-year survivorship are factored in, sustained retail profitability converges toward roughly 1%.

Regulatory risk warnings capture short-term variance. In any 3- to 12-month window, a meaningful minority of participants (20%–30%) remain positive purely through directional market beta or statistical luck. When sovereign exchange-cleared records are tracked over multi-year horizons, this temporary survival rate collapses as factors such as cumulative drag of bid-ask spreads, overnight financing, exchange levies, and adverse institutional execution remove non-systematic edge.

To recap: It is important to remember that the common broker risk warnings are not created in the same way as individual research projects based on exchange or regulator micro data. Mandatory broker risk warnings typically show the share of active retail accounts making or losing money over a reporting window, with this particular broker. They are current, and they are derived using regulatory definitions from the applicable financial authority. They can include traders from a wide range of nationalities. When the timeframe is short, e.g. three months, short-term winners that simply got lucky can skew the results.

Longer-term academic research based on exchange or regulator micro data can track traders over longer periods of time, which can reduce the influence of short-term luck. The paper can, for instance, ask whether last year’s winners remain next year’s winners, whether experience improves performance, and whether gross returns survive transaction costs. But these research results can also be very difficult to compare, since each researcher or research team follows their own structure. The papers are not derived using a template provided by a financial authority. Just as with the mandatory broker warnings, the studies can include trader data from a wide range of nationalities.

Taiwan: The Barber, Lee, Liu, and Odean Benchmark

Taiwan provides one of the most complete datasets ever used to study individual trader performance.

Brad Barber, Yi Tsung Lee, Yu Jane Liu, and Terrance Odean obtained complete transaction records from the Taiwan Stock Exchange. Their paper, Just How Much Do Individual Investors Lose by Trading?, examined complete trading histories from 1995 to 1999.

The results were economically large. Individual investors suffered an annual performance penalty of 3.8 percentage points. Their aggregate losses were equivalent to approximately 2.2% of Taiwan’s GDP and 2.8% of personal income. Institutions, by comparison, gained from trading.

Trading costs were only part of the problem. Individual investors also tended to lose through aggressive order placement and poor security selection.

The authors’ later study, The Cross Section of Speculator Skill: Evidence from Day Trading, extended the analysis to Taiwanese day traders between 1992 and 2006. In an average year, roughly 450,000 Taiwanese individuals participated in day trading. Around 20% of traders meeting the paper’s activity threshold earned positive abnormal returns net of fees during an average year. But once researchers looked into whether prior winners continued to produce abnormal profits, the population shrank drastically. Only about 4,000 traders, less than 1% of the day trader population, displayed sufficiently repeatable performance to earn reliably positive abnormal returns net of fees in the following year.

A European broker may say 25% of its accounts were profitable over twelve months. Taiwan shows why that does not mean one quarter of retail clients possess profitable trading skill. Luck produces winners in any short sample. Persistence is harder.

The Taiwanese data also shows that the distribution of ability is not perfectly flat. Some traders really did outperform. The top 500 previously ranked traders subsequently earned strong positive abnormal returns after fees. The study therefore does not support the claim that profitable day traders do not exist. It supports a narrower statement: longer-term profitable traders exist, but they are rare.

Empirical Methodology

• Dataset Scope: 100% of all orders, executions, and cleared trades across individual investors, domestic institutions, and foreign institutional entities on the Taiwan Stock Exchange (TSEC). The authors acquired the complete trading records of the TSEC from the exchange’s clearing house, capturing every trade executed by all market participants over a multi-year horizon.
• Order Classification: The authors separated every retail transaction into aggressive orders (market orders or limit orders that cross the spread, demanding immediate liquidity) and passive orders (unfilled limit orders standing on the order book, supplying liquidity).
• Return Attribution: Portfolio returns were evaluated net of the Taiwan transaction tax (0.3%) and standard commissions (0.1425%), benchmarked against passive index holding returns.

Key Empirical Findings

• Aggregate Economic Drag: Individual investors suffered an aggregate performance penalty of 3.8 percentage points per year relative to a passive benchmark. In economic terms, retail day trading losses equalled 2.2% of Taiwan’s entire Gross Domestic Product (GDP) and 2.8% of total personal income.
• The Aggressive Order Penalty: Virtually all aggregate individual trading losses stemmed from aggressive orders. While retail passive limit orders earned modest short-term returns, retail aggressive orders persistently surrendered edge to institutional algorithms.
• Capital Transfer to Institutions: In direct opposition to retail participants, institutional investors recorded an annual performance boost of 1.5 percentage points, with foreign institutional investors capturing nearly half of all institutional profits.
• Multi-Year Edge Persistence: In follow-up research on day-trader skill persistence (Barber et al., 2014), the researchers found that while roughly 18% to 20% of individual traders demonstrated gross positive returns in an isolated quarter, less than 1% exhibited statistically persistent, net-of-fee profits over horizons exceeding two years.

Source:

Barber, B. M., Lee, Y. T., Liu, Y. J., & Odean, T. (2009). Just how much do individual investors lose by trading? The Review of Financial Studies, 22(2), 609–632.

Brazil: Following New Day Traders for Hundreds of Sessions

Brazil provides perhaps the clearest evidence on what happens when beginners persist with day trading. To test the viability of day trading as a career, Fernando Chague, Rodrigo De-Losso, and Bruno Giovannetti (2020) evaluated microdata provided directly by Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM). Fernando Chague, Rodrigo De Losso and Bruno Giovannetti used regulatory data covering all individuals who began day trading mini Ibovespa futures between 2013 and 2015. Ibovespa is the name of Brazil’s main stock-market index, the Índice Bovespa.

The cohort contained 19,646 new day traders. The researchers grouped them according to how long they continued. Profitability fell rather than improved as trading experience accumulated. Among people who day traded for only one day, 29.8% produced a positive net profit. For those trading between two and fifty days, the figure fell to 15.5%. It dropped again as persistence increased. Among the 1,551 people who continued for more than 300 trading days, just 3% made a positive net profit. In other words, 97% lost money after fees.

The study also showed that only 1.1% of traders earned more than the Brazilian minimum wage from their day trading. About 0.5% earned more than the starting salary of a bank teller in the final version of the study. The top trader averaged approximately US$310 per day, but returns came with very high daily volatility.

The researchers did not find evidence that the average trader learned to become profitable through repetition. That finding challenges a commonly repeated explanation for poor retail trading results: “Most people fail because they quit before they become experienced”. The Brazilian dataset allowed that theory to be tested, and it showed that the traders who continued the longest had a lower success rate, not a higher one.

Of course, individuals trading mini Ibovespa futures are a narrow subset of forex traders. Mini Ibovespa futures are exchange-traded equity index futures, not OTC currency contracts. The study therefore did show that 97% of long-term forex traders in Brazil, or elsewhere, lose money. What it did show was that for this subset of forex traders, persistence by itself is not evidence of skill, and trading for hundreds of sessions does not automatically turn negative expectancy into positive expectancy.

Empirical Methodology

• Dataset Scope: The researchers tracked all 19,626 individuals who began day-trading the mini-Ibovespa futures contract (WIN) between 2013 and 2015, following their complete ledger until 2017. During the study, WIN was the most liquid retail speculative instrument in Latin America.
• Persistence Filter: The study filtered for survivorship and deliberate practice by evaluating individuals who persisted across increasing increments of trading activity, from 1 day up to 300+ trading days.
• Cost Structure: P&L was calculated after deducting exchange fees (B3 clearing costs) and standard brokerage commissions.

Key Empirical Findings

• Persistence does not equal improvement: Among individuals who persisted for more than 300 trading days, 97% lost money.
• No Learning Curve: The regression showed a flat-to-negative learning curve. Trading frequency and experience did not correlate with improved daily win rates, indicating that retail persistence merely deepened fee attrition.
• Failure to Meet Minimum Wage: Only 1.1% (127 individuals out of the cohort) earned an average daily net profit greater than the Brazilian minimum wage, which was approximately R$ 100 per day at the time of the study.
• Extreme Return Volatility: The single most profitable trader across the entire multi-year dataset averaged roughly R$ 310 per day net, accompanied by substantial daily standard deviation and drawdown risk.

Source:

Chague, F., & Giovannetti, B. (2020). Day-trading stocks for a living? Brazilian Review of Finance, 18(3), 1–4.

India: One of the Largest Modern Retail Derivatives Datasets

India now provides some of the largest regulator-produced datasets on individual derivatives trading. The Securities and Exchange Board of India (SEBI) has published a series of regulator-produced studies analysing the profitability and trading behaviour of individual traders in India’s equity derivatives segment. The series includes studies covering FY2021–22, FY2021–22 through FY2023–24, and FY2024–25 through FY2025–26.

SEBI’s January 2023 study examined individual participation in the equity futures and options market during FY22. It found that 89% of individual traders lost money, leaving roughly 11% profitable. Among active traders after removing extreme outliers, only around 6% were profitable, and the average loss suffered by loss-makers was more than fifteen times the average profit of profitable traders in that adjusted group.

SEBI expanded the analysis in 2024. Its study covering FY22 through FY24 found that 93% of individual traders incurred losses and aggregate losses exceeded ₹1.8 lakh crore over the three-year period. That means roughly 7% avoided a net loss across the study’s measurement basis. The data is particularly useful because India’s derivatives market attracted millions of newer retail participants after the pandemic, especially into short-dated options.

There are now newer datasets available. In August 2026, SEBI released two new studies examining the profitability and trading behaviour of individual traders in the equity derivatives segment, covering FY2025 and FY2026.

• SEBI — Study: Profitability of Individual Traders in the Equity Derivatives Segment (FY25–FY26). Published August 20, 2026.
• SEBI — Study: Trading Behaviour of Individual Traders in the Equity Derivatives Segment (FY25–FY26). Published August 20, 2026.

SEBI’s FY25–FY26 studies show that individual participation in equity derivatives declined following regulatory changes. But SEBI itself cautions that causality is difficult to establish because multiple factors may explain changes in trading volumes. In FY26, 87.7% of individual traders incurred losses, while 12.3% were profitable. Aggregate net losses were approximately ₹91,685 crore. The share of loss-making traders therefore improved relative to the 93% reported for FY22–FY24, but loss-making individual traders still represented the large majority of participants.

SEBI’s more recent behavioural work also found trading heavily concentrated in options buying and linked higher trading intensity with worse outcomes. Traders with years of participation still showed high loss rates, another warning against assuming that time spent trading automatically creates an edge. Again, none of this proves that Indians are worse traders than U.S. traders or Australian traders. India’s dataset contains a very different product mix. For starters, short-dated options have convex payoff structures, time decay, and transaction cost effects that are not comparable with an investor holding unleveraged shares for several months.

The dataset tells us a great deal about Indian equity derivatives trading. It tells us much less about how traders in India perform compared to traders in other countries.

Empirical Methodology

• Dataset Scope: Millions of unique individual Demat trading accounts participating in index and stock derivatives over three consecutive fiscal years. A Demat account (“dematerialized account”) is an account in India used to hold securities electronically, rather than as physical certificates.
• Categorization: Market participants were segmented into Individuals, Proprietary Trading Desks, Foreign Portfolio Investors (FPIs), and Others (family offices, corporates, trusts).
• Friction Measurement: Gross trading P&L was reconciled against direct transaction costs, including brokerage commissions, exchange turnover charges, and the Securities Transaction Tax (STT).

Key Empirical Findings

• Net Loss Rate: Between 89% and 93% of active individual retail derivative traders closed their fiscal years with net losses.
• Asymmetric P&L Distribution: The average loss for unprofitable retail traders was roughly 15 times higher than the average net gain earned by the 7% to 11% profitable minority.
• Transaction Friction Dominance: Retail traders collectively paid over 50,000 crore INR (500 billion Indian rupees) in transaction charges across a 3-year window. For retail options traders, transaction costs represented an additional 25% to 30% performance hurdle on top of gross directional losses.
• Capital Transfer Dynamics: Similar to the Taiwanese findings, over 95% of aggregate derivative market profits were absorbed by algorithmic proprietary desks and Foreign Portfolio Investors (FPIs), who primarily served as institutional option sellers and market makers collecting premium decay against retail option buyers.

Sources

• Securities and Exchange Board of India (SEBI). (2023). Analysis of Profit and Loss of Individual Traders dealing in Equity F&O Segment. January 25, 2023. (This is the FY2021–22 study that found 89% of individual traders incurred losses.)
• Securities and Exchange Board of India (SEBI). (2024). Analysis of Profits & Losses in the Equity Derivatives Segment (FY22–FY24). September 23, 2024. (This is the expanded three-year study covering FY2021–22 through FY2023–24. SEBI reported that 93% of individual traders incurred losses and aggregate losses exceeded ₹1.8 lakh crore.)
• Securities and Exchange Board of India (SEBI). (2026). Study – Profitability of Individual Traders in the Equity Derivatives Segment (FY25–FY26). August 20, 2026.
• Securities and Exchange Board of India (SEBI). (2026). Study – Trading Behaviour of Individual Traders in the Equity Derivatives Segment (FY25–FY26). August 20, 2026.

United States: Active Stock Investors Also Pay for Trading

There is a US academic study that gives an interesting control because it examines ordinary stock investors rather than only leveraged derivatives traders. Barber and Odean’s Trading Is Hazardous to Your Wealth studied 66,465 households at a large US discount brokerage between 1991 and 1996. The most active traders earned an annual return of 11.4%, compared with 17.9% for the market. The average household in the study earned 16.4% and turned over about 75% of its stock portfolio annually. The point was not that every active trader lost money in absolute terms. Stocks rose strongly during much of the sample, so many investors generated positive nominal returns. The issue was relative performance. Frequent trading consumed returns through costs and poor trading decisions.

Kenneth French reached a related result from a market-wide perspective in The Cost of Active Investing. Using U.S. equity-market data from 1980 to 2006, he estimated that investors spent approximately 0.67% of the aggregate market value each year on the incremental costs of active investing relative to a passive market portfolio.

It is important not to place these U.S. stock-trading results into a simple “percentage profitable” comparison alongside figures from studies examining fundamentally different forms of trading, such as leveraged forex speculation. The underlying datasets, definitions of profitability, time horizons, and trading products differ substantially, meaning that the studies answer different questions. Nevertheless, a recurring pattern emerges across the literature. Higher levels of trading activity generally increase the costs and performance challenges faced by individual traders rather than improving their outcomes.

Product Mix, Access to Leverage, and Trading Frequency Matter More Than Passport And Residency

Products

The financial product being traded can often explain more about trader profitability than the country listed in an account registration field, making headline profitability comparisons potentially misleading. Academic studies of trader profitability vary substantially in their scope, methodology, datasets, definitions, and measurement periods, meaning that their findings are not directly comparable.

Comparing a UK CFD trader with an Indian weekly option buyer is not an apples-to-apples comparison. The risk profile of a leveraged EUR/USD CFD is different from the risk profile of an expiring index option. A stock day trader in Taiwan faces another payoff structure. A U.S. investor turning over a diversified cash equity portfolio several times per year sits in a fourth category.

India’s recent results are a good example. SEBI’s latest work reports that about 92% of aggregate individual trader losses arose from options trading. Calling that an “Indian trader loss rate” hides most of the economically useful information. It is primarily evidence about a retail population heavily concentrated in options.

Access to Leverage

A trader operating with 1:30 leverage can control a $30,000 position with $1,000 of margin. At 1:500, the same $1,000 can theoretically support $500,000 of exposure.

The trader does not need to use all available leverage, of course. Maximum permitted leverage and actual position leverage are different. But higher limits make catastrophic sizing errors much easier.

The UK FCA found evidence that higher leverage contributed to greater potential harm for retail CFD clients and concluded that limiting leverage would reduce overall retail losses. This evidence helped underpin the permanent leverage restrictions introduced in 2019.

Australia’s ASIC provides similar evidence. Before the ASIC intervention, retail CFD leverage offered by ASIC licensed brokers could be as high as 1:500. From March 2021, ASIC capped leverage at 1:30 for CFDs referencing major currency pairs, with lower limits applying to other asset classes. During the first six months of the broader intervention, aggregate net losses by retail CFD accounts fell by 91%, from an average of A$372 million to A$33 million per quarter.

That does not establish that lower leverage makes retail traders profitable. Australia’s later data still show that 68% of retail CFD clients lost money in FY2024. What leverage caps appear particularly effective at, however, is limiting the extent to which adverse outcomes can become extremely large extremely quickly. This distinction matters when comparing brokers and jurisdictions that permit very high retail leverage on CFDs and similar products. There is no reliable global dataset demonstrating that every jurisdiction permitting leverage of 1:500 or 1:1000 has a retail loss rate above 90%. That figure is frequently repeated online, but it is not supported by comprehensive regulator-level evidence across those jurisdictions.

The available evidence supports a more measured conclusion. High leverage magnifies exposure to market movements, increasing both potential gains and potential losses. The principal risk is that even a relatively small adverse price movement can produce a disproportionately large loss relative to the trader’s capital and lead to a rapid margin close-out.

The evidence does not justify assigning a precise loss rate (e.g. “above 90%”) to markets where regulators allow high retail leverage while not publishing representative profitability data. We simply do not know enough about these jurisdictions to draw any reliable conclusions.

The Friction Problem Gets Worse as Trading Frequency Rises

Trading begins with a question of price direction. Once transaction costs are taken into account, however, profitability depends not only on getting the direction right but also on overcoming the arithmetic of costs, fees, and execution. A trader can possess a small forecasting edge and still lose money if trading expenses are larger than that edge.

This effect compounds with frequency. ASIC’s 2026 CFD study provides unusually direct evidence. Five percent of Australian retail CFD clients would have been profitable before fees but became loss-making after fees. Among highly active traders with more than 50 positions open per month on average, 19% of clients who were profitable before fees became unprofitable after them. This is close to a controlled demonstration of the friction problem. The trader does not merely need to predict correctly. The expected edge must exceed the spread, slippage, commission, and financing burden repeatedly.

Taiwan offers a similar lesson in an exchange-based setting. Barber and his co-authors found that transaction costs materially reduced the performance of individual investors, while virtually all of their trading losses could be traced to aggressive orders. The study estimated that trading losses, commissions, transaction taxes, and market-timing losses together reduced the annual return on the aggregate portfolio of individual investors by approximately 3.8 percentage points.

The Indian SEBI studies listed further up in this article show another side of the same problem. When SEBI published its series of studies analysing the profitability and trading behaviour of individual traders in India’s equity derivatives segment in FY2021 through FY2026, it became clear that futures and options traders in India are facing significant brokerage, exchange, and statutory transaction costs. As turnover rises, a modest cost per trade can become a large annual hurdle.

Who Trades?

Regulation

Rules influence who trades and what they can do with their account, and this is important to take into account when we attempt to compare numbers from different countries. A United Kingdom brokerage offering a maximum of 1:30 leverage, combined with mandatory appropriateness testing, negative balance protection (NBP), and strict marketing rules attracts a different client population from a provider based in Vanuatu that is advertising 1:1000 retail leverage, deposit bonuses, and small minimum deposits to UK traders willing to sign up with a foreign broker.

This creates a selection problem. Suppose strict regulation discourages the least prepared entrants from opening accounts. Profitability at the remaining broker population could improve even if no individual became better at forecasting prices. Conversely, a low-barrier market can attract large numbers of first-time traders.

India’s post-pandemic derivatives expansion illustrates how rapidly participation demographics can shift. SEBI’s later data shows the number of individual derivatives traders eventually contracting after regulatory measures tightened.

Changes in a country’s profitability statistics can therefore reflect changes in who trades, not merely changes in how well existing traders perform.

Income and Employment Incentives Can Affect Participation

Economic conditions can affect the reason someone enters trading in the first place. A high-income investor using derivatives to hedge a portfolio is not in the same position as somebody who tries retail trading because they are struggling to find even a minimal wage job in their local economy.

Brazil’s day trading study was explicitly designed around the question “Can an individual realistically make a living from day trading?” The answer for the population studied was grim. Only 1.1% of persistent traders earned more than the country’s minimum wage from their activity. The finding should not be turned into a stereotype about emerging market traders, but it does raise interesting questions about incentives.

Where retail derivatives are promoted as low-capital income opportunities, participation can include people whose financial resources are small relative to the risks they take. SEBI’s 2026 behavioural findings from India similarly indicated greater trading intensity among younger investors and people with smaller financial portfolios. Such factors can influence a country’s aggregate results without saying anything about innate trading ability.

So, Which Country Has the Most Profitable Traders?

The available evidence does not justify naming one. A French trader using a Cyprus regulated CFD broker, an U.S. trader speculating on spot forex through Interactive Brokers, and an Indian trader buying weekly index options operate under different products, costs, leverage limits, and market structures. Their passport and residency tells us remarkably little about their expected P&L.

A superficial ranking could put United States regulated forex traders near the top because roughly one third were profitable in the CFTC’s 2021 to 2022 reference period and some US brokers currently report even higher figures. Australia’s FY2024 CFD data gives another roughly one third profitable. Current UK broker warnings can also imply profitability rates around 26% to 32%. EEA historical samples ranged from roughly 11% profitable in France to 26% in Ireland. Then Brazil appears near the bottom at 3% among persistent day traders, and Taiwan falls below 1% when the test becomes predictable, repeatable abnormal returns after costs.

But that ranking would be statistically dishonest. The US figures measure quarterly OTC forex accounts. The UK figures measure rolling CFD account results. The French research followed leveraged trading clients for several years. Brazil selected traders who persisted for more than 300 sessions. Taiwan tested whether prior performance predicted future net abnormal returns. India mainly measured exchange-traded futures and options.

Change the study mechanics and the ranking changes with it.

What survives almost every dataset is a more useful finding. Most active retail traders in leveraged and short-horizon products lose money after costs. A meaningful minority can finish a quarter or year in profit. A much smaller group appears able to repeat that performance for long periods in a manner consistent with genuine trading skill. The studies also identify the conditions under which retail trading becomes hardest, which is high turnover, substantial leverage, high trading friction, and short horizons.

We also see that certain types of regulation can reduce the scale of losses. Australia’s experience after leverage restrictions provides good evidence for that. It does not turn trading into a positive-expectancy activity for the median retail account.