SEBI study found that the overall individual trader base contracted 18%, from 1.06 crore in FY25 to 87.5 lakh in FY26.
The country’s equity derivatives market has taken on a notably younger profile, with traders under 30 making up 43 per cent of individual participants in FY26, a sharp rise from 31 per cent four years earlier, according to a study.
However, the younger cohort also recorded a higher incidence of losses, the study by the Securities and Exchange Board of India (SEBI) revealed.
Around 89 per cent of traders below 30 were loss-makers in FY26 compared to 81 per cent of participants above 60.
The changing age profile is part of a wider transformation in the retail derivatives market, which has increasingly drawn investors outside India’s largest cities and from relatively lower-income groups.
Lower-income investors
About three-fourths of individual derivatives traders belonged to the annual income category of below ₹5 lakh. This group accounted for 43 per cent of turnover, but 53 per cent of aggregate losses, the regulator said.
Around 88 per cent of traders in this income category incurred losses, compared with 81 per cent of investors with annual income of above ₹1 crore.
The geographical spread of derivatives participation has been equally striking.
Small town investors
Investors from smaller towns (B30) accounted for about two-thirds of individual traders and nearly half of derivatives turnover in FY26.
The study noted that B30 investors account for only about one-fourth of individual mutual fund assets, pointing to a markedly higher derivatives risk appetite relative to their broader investment behaviour.
The study also examined the relationship between derivatives trading and the size of investors’ underlying equity portfolios.
In FY2526, around 95 lakh, or 78 per cent, of individual derivatives traders had equity portfolios below ₹1 lakh.
This group accounted for 51 per cent of turnover, but as much as 70 per cent of aggregate losses.
The study also found that traders with equity portfolios below ₹1 lakh, but derivatives turnover above ₹1 crore, represented only 13 per cent of traders, though accounted for 52 per cent of aggregate losses.
Around 43 lakh traders, or 35 per cent of individual derivatives participants during FY25-26, had no underlying equity portfolio at the end of FY26.
This indicated participation in derivatives without any cash-equity holdings.
Trader base shrinks
The study also found that the overall individual trader base contracted 18 per cent, from 1.06 crore in FY25 to 87.5 lakh in FY26.
SEBI’s analysis examined how trading outcomes varied with age, income, location, trading activity and portfolio size, while cautioning that these relationships should not be interpreted as proof of causation.
Published on August 23, 2026
Source link
