Less than 2% dare to go only-derivatives: NSE's Market Pulse report

Out of nearly 9 million individual investors active in the equity derivatives segment, 2.1 million traded only in futures and options (F&O) during the period

Only about 1.8 per cent of India’s registered investors traded exclusively in equity derivatives over the past 12 months, according to National Stock Exchange’s (NSE’s) latest Market Pulse report, which includes data up to September.

 

Of the nearly 9 million individual investors active in the equity derivatives segment, 2.1 million traded only in futures and options (F&O) during the period.

 

In contrast, of the 37.2 million investors who traded in the past 12 months, around 28.2 million — or nearly 76 per cent — were active only in the cash segment.

 

Moreover, about 77 per cent of derivatives traders also participated in the cash segment.

 

 

“These figures help dispel the common misconception of disproportionately high retail participation in the equity derivatives segment,” the report observed.

 

A recent survey by the Securities and Exchange Board of India (Sebi) found that F&O penetration across India remains below 1 per cent. The regulator highlighted trust and transparency as key concerns among investors, particularly with complex products such as equities and derivatives.

 

The survey also underlined the need for stronger investor education, with many respondents citing expectations of quick gains from small investments as a major trigger for entering F&O trading.

 

Earlier, Sebi had reported that over 90 per cent of retail traders in the derivatives market incur losses.

 

Investor participation in equity derivatives rose to 3.36 million in September from a five-month low of 3.19 million in August. During the first half of the current financial year (2025-26/FY26), 6.2 million new investors were added.

 

Despite the recent uptick, F&O participation has been declining steadily since peaking at 5.26 million in June 2024. By March 2025, participation had fallen to a 23-month low of 3 million, following regulatory measures introduced in November 2024, including higher contract sizes, restricted expiries, and increased margin requirements.

 

In September, individual investors remained net buyers for the third consecutive month. Between March and June, however, they had pulled out a total of ₹28,488 crore amid rising trade tariffs and geopolitical tensions. The trend reversed in the second quarter, with net investments in the secondary market totalling ₹20,469 crore. Net inflows, however, moderated from ₹11,744 crore in July to ₹491 crore in September.

 

For FY26 so far, individual investors have recorded total net inflows of ₹7,332 crore — sharply lower than ₹57,089 crore in the same period last year — reflecting a more cautious investment approach, the NSE report added.

 

Making it count

• 120 million+ Registered investors on NSE
• 37.2 million Investors who traded in the past 12 months
• 28.2 million Active only in cash segment
• 9 million Investors active in equity derivatives
• 2.1 million Traded only in F&O segment