Individual traders in India's equity derivatives market fell about 20% in fiscal 2026, while their aggregate net losses also declined, the country's markets regulator said on Thursday.
Aggregate net losses of individual traders fell to about 916.85 billion rupees in the year ended March 2026, from losses of about 1.12 trillion rupees a year earlier, the Securities and Exchange Board of India said in a study.
However, 87.7% of individual traders continued to incur losses during the year, SEBI said.
The pace of exits from the segment accelerated in fiscal 2026, with 4.6 million traders who had participated in equity derivatives in fiscal 2025 not returning the following year, compared with 2.6 million exits in fiscal 2025, according to the study.
SEBI has previously found that most individual traders lose money in equity derivatives, prompting the regulator to step up efforts to protect retail investors from excessive speculative activity.
It has introduced a series of measures to curb excessive speculation in equity derivatives, including raising contract sizes for index derivatives, reducing weekly index expiries and requiring upfront collection of option premiums.
ALGO TRADERS DOMINATE PROFITS
In contrast to individual traders, larger market participants such as proprietary traders and foreign portfolio investors have continued to record substantial trading profits.
Proprietary traders, or firms that trade using their own capital, recorded the highest gross trading profit at about 440 billion rupees in fiscal 2026, followed by foreign portfolio investors at 140 billion rupees.
The regulator said 99% of the profits made by foreign portfolio investors and proprietary traders were generated by algorithmic trading entities.
Trading remained heavily concentrated around the expiry of derivative contracts, with 59% of index options turnover taking place on the expiry day itself and about 75% occurring within one day of expiry.
($1 = 95.7050 Indian rupees)
