India’s equity derivatives market is seeing more young traders and investors from smaller towns, while people from lower-income groups are also making up a large part of the market, according to a Sebi study.Traders under the age of 30 made up 43% of individual derivatives traders in FY26, up from 31% four years ago. But younger traders were also more likely to lose money. About 89% of traders below 30 made losses in FY26, compared with 81% of those above 60.The study also showed that derivatives trading is no longer limited to people from big cities or higher-income groups.About three-fourths of individual derivatives traders earned less than Rs 5 lakh a year. They accounted for 43% of the total turnover but made up 53% of the total losses.Around 88% of traders earning below Rs 5 lakh made losses, compared with 81% of those earning more than Rs 1 crore a year.Smaller towns drive participationInvestors from smaller towns, or B30 areas, accounted for about two-thirds of individual derivatives traders and nearly half of the turnover in FY26.This was much higher than their share in mutual funds. B30 investors account for only about one-fourth of individual mutual fund assets.Sebi also looked at the size of traders’ equity portfolios. Around 95 lakh traders, or 78% of individual derivatives traders, had equity portfolios worth less than Rs 1 lakh in FY25-26.This group accounted for 51% of turnover but 70% of the total losses.Among them, traders who had less than Rs 1 lakh in equity holdings but traded more than Rs 1 crore worth of derivatives made up only 13% of all traders. However, they accounted for 52% of the total losses.43 lakh traders had no equity holdingsThe study found that around 43 lakh traders, or 35% of individual derivatives participants in FY25-26, had no equity portfolio at the end of FY26.This meant they were trading in derivatives without holding any cash equities.Despite the changing profile of traders, the overall number of individual derivatives traders fell by 18%. The number declined from 1.06 crore in FY25 to 87.5 lakh in FY26.Sebi’s study looked at trading results across different age groups, income levels, locations, trading activity and equity portfolio sizes. It cautioned that the links found between these factors and trading outcomes should not be treated as proof that one caused the other.
