Active Derivatives Trader Base Drops to 87.5 Lakh in FY26: SEBI Study

India's equity derivatives market saw its active retail trader base decline in FY26. The number of unique active traders fell 18% to 87.5 lakh, compared with 106.2 lakh in FY25, according to The Business Standard news report citing two studies released by the Securities and Exchange Board of India (SEBI). 

This was the first annual fall in active participation in the segment in a decade, following years of growth after the pandemic. 

Smaller Traders Account for Sharp Fall 

The reduction was more visible among traders with lower levels of activity. The number of traders with annual turnover below ₹10,000 fell 37% during FY26. 

New participation also declined, with first-time traders falling 40% to 20.8 lakh. Around 46 lakh traders who were active in FY25 did not trade during FY26. 

Regulatory Changes During the Period 

The decline came after changes introduced by SEBI in November 2024. The regulator limited weekly index derivative contracts to one per exchange and increased the minimum contract size. 

The Securities Transaction Tax (STT) was also raised. These changes affected trading activity, particularly in the initial period following their implementation. 

Options Turnover Recovers 

Options premium average daily turnover fell 17.4% after the regulatory changes were introduced. Trading activity later increased during the second half of FY26. 

Average daily turnover in options premium rose 38% to ₹81,696 crore during the latter half of the financial year. 

Individual Traders Continue to Report Losses 

Aggregate net losses of individual traders declined 18% to ₹91,685 crore in FY26 from a revised ₹1.12 trillion in FY25. However, the average net loss per active trader increased 2.4% to ₹1.17 lakh. 

Among loss-making traders, the average loss was ₹1.47 lakh. Profitable traders recorded an average gain of ₹1.22 lakh, while 87.7% of individual traders reported net losses during FY26. 

Institutional Profits Remain Concentrated 

Proprietary traders reported gross profits of ₹44,483 crore, while Foreign Portfolio Investors recorded ₹13,896 crore. Algorithmic entities accounted for 99% of these gains. 

The top 10 proprietary trading desks accounted for nearly 75% of total gross profits earned by proprietary traders during FY26. 

Read More: India Becomes Asia’s Least-Preferred Stock Market, Overtaking Indonesia: BofA Survey! 

Conclusion 

FY26 recorded a decline in active and new derivatives traders, while a large share of individual participants continued to report losses. Trading activity recovered in the options segment later in the year, even as institutional gains remained concentrated. 

 
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