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India’s Retail Leverage Shifts From Options To Slower MTF

India’s Retail Leverage Shifts From Options To Slower MTF
India’s retail leverage did not shrink. It moved to a slower clock. · thehindubusinessline.com

Fewer Indian investors are trading equity derivatives, such as futures and options.

Their total losses have gone down, but the average loss for each remaining trader has risen.

At the same time, more investors are borrowing money to buy and hold shares through Margin Trading Facility, or MTF.

This means people may be moving from fast, short-term bets to slower, borrowed investments.

MTF gives investors ownership of shares, but they pay interest on the money borrowed.

If a share does not rise, the interest still keeps adding to the cost.

Risk can be greater when borrowed money is used on smaller or less-liquid stocks.

Regulators are proposing rules to strengthen brokers and improve reporting.

The article says trading platforms should clearly show how much holding a position will cost before investors buy.

Key facts

Derivatives traders
Unique individual traders fell from 98.10 lakh in FY25 to 78.60 lakh in FY26.
Aggregate derivatives losses
Losses narrowed from ₹1,11,788 crore to ₹91,685 crore.
Average loss
Average loss per remaining trader rose from ₹1,13,913 to ₹1,16,654.
MTF record
The combined NSE and BSE MTF book reached ₹1.48 lakh crore on 14 August.
MTF composition
₹75,033 crore was in stocks without listed derivatives, ₹68,766 crore in F&O stocks, and ₹3,794 crore in ETFs.
Client exposure
Exposure per active NSE client rose from about ₹20,000 to more than ₹32,000 in twelve months.
Illustrative carrying cost
Borrowing ₹75,000 at 15% annually to fund a ₹1 lakh position costs ₹11,250 per year before taxes and fees.

Sources

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