New Delhi, Aug 21: Retail participation in India’s equity derivatives market declined during FY26, while a sharp rise in the number of traders leaving the segment points to a more cautious approach towards high-risk trading, according to a recent study by the Securities and Exchange Board of India (SEBI).
The number of active individual traders fell by around 18 per cent year-on-year to about 87.5 lakh in FY26, compared with 1.06 crore in the previous financial year. At the same time, around 46 lakh traders who participated in FY25 did not return to the segment in FY26, up significantly from about 26 lakh exits a year earlier.
The decline in participation also coincided with a reduction in aggregate losses. Individual traders recorded combined net losses of around Rs 91,685 crore in FY26, compared with approximately Rs 1.12 lakh crore in FY25, representing an 18 per cent decline.
The latest figures come amid SEBI’s efforts to strengthen investor protection and encourage more responsible participation in the derivatives market. The regulator has introduced measures aimed at reducing excessive speculative activity and improving risk management in equity derivatives.
Options continued to account for the overwhelming majority of retail derivatives activity. SEBI’s study found that 99.3 per cent of individual traders participated in options at least once during FY26, while 93 per cent traded exclusively in options.
The findings underline the importance of understanding the risks associated with derivatives, particularly products involving leverage and short-term trading. For individual investors, greater awareness of market volatility, transaction costs and potential losses can support more informed financial decisions.
The moderation in retail participation can also be viewed as part of the evolving maturity of India’s capital market, where investors are increasingly assessing products according to their risk appetite and financial objectives.
With India’s retail investor base continuing to expand across different investment avenues, the latest SEBI findings reinforce the importance of financial literacy, responsible participation and stronger risk awareness in building a sustainable investment ecosystem.