Regulation & risk

1. The reality of F&O trading in India

Options trading is high-risk, and the regulator own data makes that unambiguous. Read this before you decide whether to trade at all.

Per SEBI study of individual traders in the equity F&O segment, about 93% incurred net losses over FY22 to FY24, with aggregate losses exceeding ₹1.8 lakh crore across roughly 1 crore traders. Only about 7% made a profit, and fewer than 1% earned more than ₹1 lakh in net annual profit after costs.

The pattern has not improved: SEBI reported that roughly 91% of individual traders in the derivatives segment lost money in FY25 as well. Transaction costs — brokerage, STT, GST, exchange charges and stamp duty — are a large part of the drag, which is exactly why every figure on our Live Performance page is shown net of those costs, not gross.

The honest takeaway: the base rate for retail F&O is heavily negative. No tool, including this one, changes that base rate for you. Trade only with money you can afford to lose entirely.

2. SEBI algorithmic-trading framework

SEBI issued a framework for retail participation in algo trading through its circular dated 4 February 2025, rolled out through 2025 with further requirements taking effect into 2026.

Key elements, in plain terms:

• Algo identification: from 1 April 2026, orders placed by an algorithm must carry an exchange-assigned Algo-ID, so every automated order can be traced to its source.
• Brokers as principals, providers as agents: an algo provider must operate through a registered broker and cannot connect directly to the exchange. The broker is responsible for the algos on its platform and conducts due diligence before onboarding a provider.
• Order-per-second threshold: below 10 orders per second you are treated as a regular API user; above it, formal algo registration applies. Low-frequency, rules-based automation for personal use sits in the lighter-touch category.
• White-box vs black-box: a white-box algo has transparent, disclosed, replicable logic. Opaque black-box algos carry heavier requirements, including a SEBI Research Analyst licence for certain provider models.
• Static IP and broker controls: retail API access is tied to whitelisted static IPs and broker-side risk controls and monitoring.

3. Where KanavAI sits within it

We describe KanavAI design factually here. This is a description of how the tool works, not a claim of any specific regulatory approval or empanelment status.

By design, KanavAI is a white-box strategy: its logic — an opening-range breakout on NIFTY, SENSEX and BANKNIFTY — is disclosed in advance and identical for every user. It is low-frequency, placing a small number of orders a day, well below the orders-per-second threshold that separates regular API use from registered high-frequency algo trading.

KanavAI operates through your own broker account and its API, on parameters you set and confirm. It does not connect directly to any exchange, does not take discretion over your trades, does not manage your funds, and does not provide investment advice. Orders are placed by the algorithm following the disclosed rules you authorised.

The framework is still being implemented and continues to evolve, and requirements differ by broker. You should confirm your own broker algo and API policies and ensure your use complies with the rules that apply to you. If anything here is unclear, seek independent professional advice before you trade.

4. What this means for you

Options trading carries a high probability of loss for individual traders, as SEBI own data shows. KanavAI is an execution tool that runs a disciplined, rules-based strategy inside limits you set — it is not a path to guaranteed or even likely profit, and it cannot remove the risk inherent in F&O.

Decide your participation accordingly: understand the strategy, size your capital conservatively, use the stop-loss and daily-loss controls, and never deploy money you cannot afford to lose.