India’s Derivatives Market Undergoes Gen Z Transformation Amid Rising Losses, Reports Sebi
India’s equity derivatives market is witnessing a surge in participation from younger traders and individuals from smaller towns, according to a recent study by the Securities and Exchange Board of India (Sebi). Traders under the age of 30 constituted 43% of individual derivatives traders in FY26, a significant increase from 31% four years prior. However, this demographic is also experiencing higher losses, with 89% of traders below 30 reporting losses in FY26, compared to 81% of those over 60.
Changing Demographics of Traders
The Sebi study reveals that the derivatives market is increasingly accessible to individuals from lower-income groups. Approximately 75% of individual derivatives traders earn less than Rs 5 lakh annually. This group accounted for 43% of the total turnover but represented 53% of the total losses. Among these traders, 88% reported losses, contrasting with 81% of those earning over Rs 1 crore.
Participation from Smaller Towns
Investors from smaller towns, referred to as B30 areas, made up about two-thirds of individual derivatives traders and contributed nearly half of the turnover in FY26. This participation rate is significantly higher than their share in mutual funds, where B30 investors account for only about one-fourth of individual mutual fund assets. The study also noted that around 95 lakh traders, or 78% of individual derivatives traders, had equity portfolios worth less than Rs 1 lakh in FY25-26, generating 51% of turnover but incurring 70% of the total losses.
Lack of Equity Holdings
The study found that approximately 43 lakh traders, or 35% of individual derivatives participants in FY25-26, had no equity portfolio by the end of FY26. This indicates that they were engaging in derivatives trading without holding any cash equities. Despite the influx of younger and lower-income traders, the overall number of individual derivatives traders fell by 18%, decreasing from 1.06 crore in FY25 to 87.5 lakh in FY26.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
