Markets series · September 2026 · built from SEBI's own FY25–FY26 study

The Options Ledger — where ₹91,685 crore went

Every rupee lost in a derivatives trade is a rupee someone else made. India's market regulator has now published the ledger for two years running. This report reads it slowly: how much, from whom, to whom, and who collects a fee on the way.

Source for every figure unless marked otherwise: SEBI, Profitability of Individual Traders in the Equity Derivatives Segment (FY25–FY26), Department of Economic and Policy Analysis, 20 August 2026 — the PDF. Individual traders means resident individuals, HUFs, NRIs, sole proprietors and PMS clients. This report is not investment advice; it is a reading of a public document.

Data snapshot

• Two years, ₹2.03 lakh crore. 1.226 crore unique individuals traded equity derivatives in FY25–FY26; 91.0% (111.6 lakh people) ended with a net loss. The two-year loss exceeds the ₹1.81 lakh crore lost in the three years before it (FY22–FY24).
• Options is the whole story. 99.3% of individuals traded options; 93% traded only options; 6.6% touched futures. Options produced 91.6% of losses. Over the two years the loss rate in options was 91.0% against 68.4% in futures.
• The winners are few. Proprietary desks earned ₹44,483 crore gross in FY26; the top ten of them took ₹33,124 crore — three-quarters of the category. FPIs earned ₹13,896 crore; the top ten took half.
• Costs on top. Individuals paid about ₹24,859 crore in brokerage, exchange fees and taxes in FY26 — roughly ₹1 lakh crore over five years. 4.4 lakh people who made a gross profit ended the year in the red after costs.
• Who trades. 43% are under 30; about three-quarters declare an annual income below ₹5 lakh; two-thirds live beyond the top-30 cities; 35% own no shares at all; 78% hold equity worth under ₹1 lakh.
• The measures. After SEBI's November 2024 curbs, the trader base fell 18% (106 → 87.5 lakh) and new entrants fell 40% — but premium turnover recovered to ₹82,000 crore a day, above pre-curb levels, and the average loss per trader rose 2%.

1. The ledger — before costs, gross, whole population

Derivatives are zero-sum before costs. SEBI says it in the study's own words: "the aggregate losses of individual traders were broadly matched by the aggregate profits of corporate and institutional participants." This is the exchange data for every participant, squared-off gross P&L, FY25 and FY26.

*SEBI's note on the category: proprietary traders "also includes global participants who operate in the capacity of Trading Member – Proprietary in India and are owned by foreign entities." The split is not domestic versus foreign; it is local prop desks versus FPI accounts. Two-year totals FY25–FY26: individuals −₹1.70 lakh crore; prop +₹90,437 cr; FPIs +₹44,980 cr; corporates +₹14,242 cr; mutual funds +₹8,208 cr; LLPs +₹7,690 cr.

2. Who wins — twenty desks, one algorithm each

Proprietary desks account for about 60% of all derivatives turnover; FPIs for about 7%. Inside the prop category the activity — and the profit — sits with a handful of firms.

• 99% of FPI and prop profit came from entities that placed at least one algorithmic order in the year. 86% of FPIs and 47% of prop desks trade algorithmically. Among individuals the "15% algo" figure mostly counts brokers' 3:20 pm automatic square-offs, not the client's own strategy.
• The ten largest prop desks are 2.3% of the category. Their ₹33,124 crore is about a third of the ₹1.04 lakh crore that all 69 lakh loss-makers lost between them.
• Even the twenty highest-turnover individuals in the country were net losers as a group (−₹77 crore).
• FPIs hold a quarter to a third of open interest on 7% of turnover: they hedge and hold. The high-frequency layer is the prop layer — some of it foreign-owned and registered locally.

"Options liquidity is therefore closely tied to the continued participation of these few large firms in the market." — SEBI, §6.19

3. Why options lose in every quarter

SEBI separates futures from options by quarter. In futures individuals are net long and track the market: they made ₹3,741 crore in Q1 FY25 when the Nifty rose 7%, and lost ₹8,081 crore in Q4 FY26 when it fell 15%. In options they lost in every quarter of both years — including Q1 FY26, when the Nifty gained 9% and the options loss merely narrowed to ₹18,878 crore. Direction does not matter because the product being bought is time.

• The expiry-day lottery. 59% of index-options turnover happens on the expiry day itself (70% before the curbs); 75% within one day of expiry; 97% within a week. Contracts more than ten days from expiry are 1% of turnover.
• Buyers, not sellers. SEBI's companion behaviour study of 5,000 traders, as reported, found about 97% of individuals are option buyers; the roughly 2% who sell options were the only group with positive median returns. A same-day out-of-the-money option is a ticket bought from a hedged market maker who keeps the time decay and the spread.
• Costs finish the job. For loss-makers, transaction costs were 35% of gross losses in FY26 (44% in FY25). 5.3 lakh gross-profitable traders in FY25 and 4.4 lakh in FY26 ended net negative purely because of costs.
• Experience does not help. 87.69% of regular traders lost, against 87.81% of first-timers. Regulars simply lost 2.3× more per head (₹1.36 lakh vs ₹59k) while trading at 46× their portfolio value. 90% of people who lost two years running lost again in the third.

4. Who the 88 lakh are

• Young. 43% are under 30 (31% in FY22). 89% of them lose, against 81% of traders over 60.
• Low declared income. About 73–75% declare an annual income under ₹5 lakh (self-declared; income data exists for 55% of the sample). This group is 43% of turnover but 53% of losses; 88% of them lose, against 71% in the ₹50 lakh–₹1 crore bracket.
• Beyond the metros. Two-thirds of traders and half of turnover come from beyond the top-30 cities — a region that holds only a quarter of the country's mutual-fund assets.
• No cushion. 42.8 lakh traders (35%) hold no equity at all. 95 lakh (78%) hold under ₹1 lakh, and this group produced 70% of losses. The 13% who hold under ₹1 lakh yet turn over more than ₹1 crore a year produced 52% of all losses.
• Leverage on nothing. Turnover is 42.5× portfolio value overall — and 101× in Andhra Pradesh, 100× in Odisha, 93× in the North-East, 92× in Bihar, 83× in Jammu & Kashmir.
• Everywhere. More than 85% of traders lose in every state. Highest loss rates: Assam 90.5%, Bihar 89.5%, J&K 89.5%, Jharkhand 89.4%, Chhattisgarh 89.1%. Maharashtra alone: 14.95 lakh traders, ₹17,036 crore lost. Highest loss per person: Telangana (₹1.83 lakh), Tamil Nadu, Karnataka, Andhra Pradesh, Delhi.
• Women are 17% of traders (13.7% in FY24), lose slightly less often (84.7% vs 88.6%) and trade at the same intensity.

5. Who bears it — the shape behind the average

The ₹1.17 lakh average loss hides a steep shape. Most people lose a little; a small group loses a great deal.

• 4,783 people lost more than ₹1 crore each in FY26. Over the two years, 13,663 people lost over ₹1 crore (average ₹2.2 crore) against 1,842 who made over ₹1 crore — seven losers for every winner. In the ₹1–10 lakh band the ratio is 21 to 1.
• The winners are shrinking: the average profit of a profit-maker halved between the two study periods, from ₹3.09 lakh (FY22–24) to ₹1.46 lakh (FY25–26), while the average loss of a loss-maker stayed at about ₹1.97 lakh.
• In every slab, from ₹10,000 to ₹10 crore, loss-makers outnumber profit-makers.

6. The costs — and who collects them

Individuals paid about ₹24,859 crore in FY26 to trade derivatives — about the same as FY25, even though turnover fell 5%, because the tax rose while brokerage fell. SEBI notes its cost figure covers about 80% of turnover, so the true number is nearer ₹31,000 crore.

• The exchange. NSE's FY26 revenue was ₹16,601 crore and its profit ₹10,302 crore; equity options alone brought ₹9,997.5 crore — 60.2% of revenue. Its IPO opened on 17 September 2026 (₹22,561 crore raise, about ₹4.42 lakh crore valuation). Source.
• The brokers. Zerodha's FY26 profit was ₹4,283 crore on roughly ₹8,500 crore of revenue, brokerage falling and margin-lending income replacing it. Source.
• The state. STT collections: ₹53,296 crore (FY25) → ₹57,522 crore (FY26) → ₹73,700 crore budgeted for FY27, after a second rate hike from 1 April 2026 (options premium 0.1% → 0.15%; futures 0.02% → 0.05%). ₹40,214 crore was collected by 17 September 2026, up 53%. Source. STT paid by individuals in derivatives rose five-fold between FY22 and FY26.
• The product. "Everyday expiry" — a weekly contract expiring on almost every trading day by FY24 — was an exchange product decision made in competition between the two exchanges, not something traders invented. The lottery was built, then taxed.

7. The other side, in the open — Jane Street

The winning side is usually invisible. One case made it public. SEBI's interim order of 3 July 2025 found that the Jane Street group made a net profit of about ₹36,502 crore in India between January 2023 and March 2025 — about ₹43,300 crore won in index options against roughly ₹7,700 crore knowingly lost in stock futures, index futures and cash. The pattern, on the eighteen expiry days SEBI examined: buy Bank Nifty stocks and futures aggressively in the morning while holding several times as much bearish options exposure, then sell in the afternoon into the settlement. On 17 January 2024 that meant roughly ₹4,400–5,300 crore of stocks and futures against about ₹32,000 crore of options exposure — a six-to-one ratio — and about ₹735 crore of profit in one day.

• Profits were booked in the Singapore and Asia entities; the cash-market losses sat in the Indian company (foreign portfolio investors cannot trade intraday in cash). The tax treatment is as reported, not adjudicated.
• SEBI impounded ₹4,843.57 crore; the trading ban was lifted once the amount was deposited; Jane Street's appeal before the Securities Appellate Tribunal was still pending in February 2026. Source.
• The Indian entity's own filing shows net trading gains of ₹4,700 crore in FY25, up from ₹790 crore the year before — a 494% rise. Source.
• The regulator has not named the other nineteen desks in its top-twenty table. It does not have to; the study says liquidity depends on them.

Background: Oxford Business Law Blog · Capitalmind.

8. What the November 2024 measures did — and did not

• Weekly expiries cut to one index per exchange; minimum lot size raised; option premium collected upfront; calendar-spread margin benefit withdrawn on expiry day; extra margin on short options on expiry day. Separately, STT was raised from 1 October 2024 and again from 1 April 2026; expiry days were consolidated to two a week from September 2025.
• Participation fell: 106.2 → 87.5 lakh traders (−18%), the first fall since FY16; new entrants −40% (34.3 → 20.8 lakh); 46 lakh people who traded in FY25 did not trade in FY26.
• The smallest left; the largest stayed: traders turning over under ₹10,000 a year fell 37%; those over ₹1 crore grew 1–3%.
• Turnover came back: premium turnover per day fell 17% after the curbs, then rose 38% in the second half of FY26 to about ₹82,000 crore — above pre-curb levels. Same-day-expiry share fell from 70% to 59%.
• Per-head loss rose 2%. SEBI's own conclusion: the measures "moderated participation but did not fundamentally alter trading behaviour."
• Scale, for perspective: India's curbs were the main reason global exchange-traded derivatives volume fell 42% in 2025 — that is how much of the world's options contracts the Indian retail lottery had become. FIA.

The pattern is not Indian. SEBI's own literature table: 97% of Brazilian index-futures day traders who persisted beyond 300 days lost; 74–89% of European CFD accounts lose; ~82% in the UK; ~68% in Australia; about two in three US retail forex accounts each quarter. Short-dated leverage loses everywhere. What is Indian is the size, the youth and the income profile of the crowd.

9. Three live levers

1. SEBI's suitability consultation. Since December 2025 the regulator has been assessing whether access to derivatives should be tied to a trader's equity holdings. A consultation paper is expected; when it opens, comments from households, not only brokers, will decide what "suitability" comes to mean. Source.
2. The NSE prospectus. An exchange whose revenue is 60% equity options is now a public company. Its risk factors on regulatory dependence are a public document; reading them is a citizen's act.
3. The STT line in the Budget. One question for a Member of Parliament: why does the Union Budget forecast growth in a tax whose base the regulator is trying to shrink?

How to check us

• Primary source: SEBI study PDF, 91 pages (landing page). Sections 4–5 hold the category ledger and concentration tables; 6–9 the individual analysis; the executive summary carries every headline figure used here.
• Method notes to keep in mind: category P&L (§1–2) is gross, whole-population, from the exchanges; individual figures (§3–8) are net of costs, from a sample of the top 15 brokers covering about 90% of individuals. Income is self-declared and available for 55% of the sample. FY25 figures were revised when the broker sample grew from 13 to 15.
• Secondary sources are linked inline: Business Standard (STT, demographics), Upstox (NSE FY26 and IPO), Entrackr (Zerodha), FIA (global volumes), Business Today (Jane Street appeal), Yahoo Finance (JSI filing), Oxford Business Law Blog and Capitalmind (the mechanics), Angel One (suitability).
• Earlier SEBI studies for the arc: September 2024 (FY22–FY24: 93%, ₹1.8 lakh crore); January 2023 (FY22: 89%).
• Everything here is CC-BY-SA 4.0. Take the numbers, re-run the reading on your own state — the state annexure is Table 45 of the PDF.

One-line synthesis

India's derivatives market has solved liquidity — and the liquidity is provided by about twenty algorithmic desks who are paid for it, every expiry day, by 88 lakh mostly young, mostly low-income people betting borrowed time; the exchange, the broker and the exchequer each take a fee on the way, and the only measure that has reduced the bill so far is fewer people showing up.