Derivatives get gen Z twist, but losses cast a long shadow: Sebi
Young traders below thirty years of age now make up an impressive forty-three percent of participants engaged in equity derivatives. However, this age group encountered a spike in trading losses in FY26. Moreover, individuals from lower-income categories and smaller towns are on the rise in the trading scene, contributing to significant turnover and losses while showcasing a greater risk appetite…
India's equity derivatives market has become increasingly youthful, with traders under 30 accounting for 43% of individual participants in FY26, a significant jump from 31% four years prior, according to a study by the Securities and Exchange Board of India (Sebi). The younger demographic also exhibited a higher rate of losses, with 89% of traders under 30 being losers compared to 81% of those above 60.
This shift in age demographics is part of a broader transformation in the retail derivatives market. The market has been attracting investors from outside India's largest cities and lower-income groups. Approximately three-quarters of individual derivatives traders belong to the annual income category of less than ₹5 lakh. Despite making up only 43% of turnover, this group accounted for 53% of aggregate losses, with 88% of them incurring losses compared to 81% of investors with an annual income above ₹1 crore.
Geographically, investors from smaller towns accounted for about two-thirds of individual traders and nearly half of derivatives turnover in FY26. Interestingly, these B30 investors, who represent only about one-fourth of individual mutual fund assets, exhibited a markedly higher derivatives risk appetite than their broader investment behavior.
The study also explored the relationship between derivatives trading and the size of investors' underlying equity portfolios, revealing complex patterns of risk-taking behavior across different age groups and income levels.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
