India’s markets regulator has intensified measures to curb risky equity derivatives trading, leading to a decline in retail investor losses and participation in FY26, reflecting a significant shift in market dynamics.
India’s markets regulator has tightened its grip on equity derivatives trading, and the early evidence suggests the campaign is having an effect. Parliament was told on Tuesday that retail investors’ aggregate net losses in futures and options fell to ₹91,685 crore in fiscal 2026 from ₹1.12 trillion a year earlier, while trading volumes and the number of individual participants also declined. According to Minister of State for Finance Pankaj Chaudhary, the Securities and Exchange Board of India’s measures have reduced speculation in a segment that had drawn millions of small investors.
The trend follows a sharp escalation in losses a year earlier. In July 2025, the Times of India reported that retail traders had lost about ₹1.06 lakh crore in FY25, up 41% from the previous year, while a separate Securities and Exchange Board of India study published through Business Standard said more than 91% of individual traders in equity derivatives were in the red. Mint later reported that the regulator’s April 2026 clampdown on excessive options speculation coincided with a nearly 25% drop in small-investor participation in FY26.
The finance ministry said the number of unique individual investors in equity derivatives fell to 78.6 lakh from 98.1 lakh, while turnover dropped to ₹202 trillion from ₹213 trillion in FY25. The average loss per person, however, edged higher to ₹1,16,654 from ₹1,13,913, showing that the market remained hazardous for those who stayed active.
The ministry listed a series of changes introduced since November 2024, including higher contract sizes for index derivatives, tighter expiry-day rules, upfront collection of option premium from buyers and closer monitoring of positions. In May 2025, Sebi added further steps to streamline expiry dates across exchanges and improve risk disclosure. Chaudhary also said companies with negative net profits can still launch initial public offerings in India, and that exchanges had reported 39 mainboard listings by loss-making firms over the past five years.
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