Futures and options : Who is making money?

SEBI's latest data shows that 87.7% of individual F&O traders lost money in FY26, with aggregate losses of ₹91,685 crore after transaction costs. That number is striking, but the more interesting part is what happened on the other side of those trades. Derivatives are essentially a zero-sum game before costs. One participant's gain comes from another participant's loss. Once transaction costs are added, it becomes negative-sum for traders as a whole. So the obvious question is: who is making money? Proprietary trading firms made around ₹44,483 crore in gross F&O profits in FY26, while FPIs made another ₹13,896 crore. Then comes the number that really changes the story: SEBI found that 99% of the profits generated by FPIs and proprietary trading firms came from algorithmic trading. While millions of individual traders are making decisions manually, professional firms are using algorithms to process data, identify opportunities and execute trades at a speed and scale that humans simply can't match.