1 week ago
SEBI Curbs Slow Retail Derivatives Rush as Losses Persist
Many ordinary investors had been trading derivatives, which are contracts linked to prices of things such as stock indexes.
In FY26, more people stopped trading derivatives than started for the first time since FY15.
The number of active traders dropped by 18%.
On average, each trader lost about Rs 1.17 lakh.
Most of the losses came from options trading.
Many trades involved contracts that were about to expire very soon.
Larger professional groups, especially proprietary traders, reported much higher gross profits.
The changes came after tighter SEBI regulations took effect.
Retail equity-derivatives exits exceeded new entrants by about 2.5 million in FY26, the first such decline since FY15.
Active equity-derivatives traders fell 18% in FY26 after rising 12.5 times over the previous decade.
The average loss per trader increased slightly to about Rs 1.17 lakh, while options generated 92% of individual traders’ aggregate losses.
Trading remained concentrated near expiry, with 59% of index-options turnover coming from same-day expiries and 97% from contracts expiring within a week.
Proprietary traders recorded about Rs 44,000 crore in gross profits, while algorithmic trading generated about 99% of FPI and proprietary-trader profits.
- Who
- Retail equity-derivatives traders, proprietary traders, foreign portfolio investors, corporates and other market participants; the study was conducted by the Securities and Exchange Board of India.
- What
- Retail participation in equity derivatives declined in FY26, while individual traders continued to record substantial losses and professional participants reported gross profits.
- Where
- India’s equity-derivatives market.
- When
- FY26; the study compares results with FY25 and identifies the first such decline since FY15.
- Why
- The slowdown followed tighter regulations introduced by the Securities and Exchange Board of India.
Key facts
- Retail trader exits
- Exits exceeded new entrants by about 2.5 million in FY26.
- Active traders
- The number of active equity-derivatives traders fell 18% in FY26.
- Average loss
- Average loss per trader rose marginally to about Rs 1.17 lakh.
- Options losses
- Options accounted for about 92% of individual traders’ aggregate losses.
- Expiry concentration
- About 59% of index-options turnover involved same-day expiries, 75% involved expiries within one day, and 97% involved expiries within one week.
- Proprietary-trader profit
- Proprietary traders recorded about Rs 44,000 crore in gross trading profit.
- Small-account losses
- Average losses among traders deploying less than Rs 10,000 fell from Rs 10,978 in FY25 to Rs 5,561 in FY26.
Sources
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