A staggering 91% of people buying and selling in fairness derivatives incurred web losses within the six months ended Might 2025, a brand new research by the Securities and Change Board of India (Sebi) discovered.
The Sebi report coated buying and selling exercise from December 2024 to Might 2025, analyzing the influence of a string of measures issued by Sebi in October 2024 to strengthen the fairness index derivatives framework and improve investor safety.
Heavy losses regardless of tighter guidelines
Sebi’s measures which debuted between November 2024 and April 2025 included rationalizing weekly and month-to-month index derivatives, rising contract sizes, mandating upfront premium assortment, and tightening place restrict monitoring. These steps have been designed to handle considerations over the explosive development in index choices buying and selling, significantly on expiry days, and mitigate systemic dangers.
Web losses for people fairness derivatives section (EDS) widened by 41% to ₹1.05 trillion in FY25, up from ₹74,812 crore the earlier 12 months. The typical loss per individual stood at ₹1.10 lakh, in comparison with ₹86,728 in FY24.
A quarterly breakdown for FY25 confirmed a decline within the variety of distinctive merchants from 61.4 lakh in Q1 to 42.7 lakh in This fall, coinciding with the rollout of regulatory measures.
Combination web losses and common losses per dealer rose by the primary three quarters, however each metrics improved barely in This fall, at the same time as the share of loss-making merchants remained above 86%.
The research exhibits index choices turnover fell 9% in premium phrases and 29% in notional phrases year-on-year. Nonetheless, when in comparison with two years in the past, volumes stay strong, up 14% (premium) and 42% (notional). For particular person buyers, turnover in premium phrases dropped 11% from the earlier 12 months however was nonetheless 36% larger than two years prior.
The variety of distinctive particular person merchants within the fairness derivatives section (EDS) fell sharply—down 20% year-on-year, although up 24% from two years in the past.
The decline was most pronounced amongst merchants with turnover beneath ₹1 lakh, a gaggle that had beforehand seen the very best development.
Market quantity sturdy
Regardless of the latest contraction, India continues to steer globally in fairness derivatives buying and selling, particularly in index choices.
In March 2025, Indian exchanges recorded a median variety of contracts traded that was greater than 4.3 instances larger than the second-ranked international alternate.
Wanting on the broader interval from FY20 to FY25, each the EDS and the money market (CM) posted sturdy development. The typical each day traded worth within the money market grew at a compounded annual development fee (CAGR) of 25%, whereas the EDS grew at 23%.
Inside derivatives, index choices (premium phrases) outpaced all others, rising at a CAGR of 72%, with single-stock choices at 54%.
Retail shifts to index choices
For particular person buyers, the shift in direction of index choices was dramatic. In FY20, solely ₹5 out of each ₹100 traded by people within the EDS went to index choices; by FY25, it had jumped to ₹41. In response to those developments, and to make sure that the speedy development within the derivatives market is matched by threat monitoring metrics, Sebi launched a number of measures on 29 Might 2025.
The measures embody shift to a extra risk-sensitive metric—delta-adjusted open curiosity—for monitoring positions throughout futures and choices, imposing a brand new restrict construction of web FutEq OI of ₹1,500 crore and a gross restrict of ₹10,000 crore (each lengthy and brief positions in index choices) and new entity-level caps for single-stock F&O publicity from 10% of MWPL for shoppers, NRIs and small FPIs, to 30% for mutual funds, proprietary books and huge institutional FPIs.
Future equal open curiosity (FutEq OI) refers back to the web publicity of a participant within the derivatives section after adjusting for the delta—a measure of how a lot an possibility or future’s worth strikes in relation to the underlying asset.
