Only a handful of traders power India’s F&O volumes, highlights Zerodha's Nithin Kamath

While market regulator Securities and Exchange Board of India (Sebi) has been taking steps to curb speculative trading in the domestic futures & options (F&O) markets, Zerodha founder and CEO Nithin Kamath on Wednesday highlighted the highly skewed nature of India’s derivatives market, noting that despite widespread perception, the F&O segment remains relatively small.

Kamath said that in March, only about 30 lakh individuals traded F&O contracts, while across FY26, roughly 20 lakh traded exclusively in derivatives. Even after combining equity and F&O participants, the number rises to just around 64 lakh, a fraction of India’s nearly 13 crore investor base.

He pointed out that only 3.8 crore investors were active across segments, implying that just 30% of investors actually traded, underlining limited participation in the markets.


More importantly, Kamath emphasized that brokerage industry revenues are heavily dependent on a small set of active traders, with a disproportionate share of activity concentrated at the top. Around 60–70% of F&O volumes are generated by just 1–2% of traders, reflecting a sharply imbalanced market structure.

According to him, the data suggests that while retail participation has expanded, trading intensity—and consequently revenues—are driven by a very narrow base of investors.

"Despite what people think about F&O trading in India and all its problems, it is still a very, very small market compared to almost anything else. In fact, in the month of March, only about 30 lakh people traded an F&O contract. Across FY26 as a whole, only about 20 lakh people traded only in F&O. If you combine people who traded in equities and F&O, that number goes up to roughly 64 lakh. So this is still a very small market. Altogether, out of nearly 13 crore unique investors, only around 3.8 crore investors were active across cash and F&O. That means only about 30% of investors traded anything at all," Kamath tweeted.

"And yet, the only reason broker revenues have held up is that a small number of people are trading more. Pretty much the entire revenue pool of the broking industry comes from this relatively small pool of traders. If you look at F&O turnover, around 60–70% of trading volumes come from a tiny set of investors, roughly just 1–2%. That is the lopsided structure of the Indian markets," he added.

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Despite what people think about F&O trading in India and all its problems, it is still a very, very small market compared to almost anything else. In fact, in the month of March, only about 30 lakh people traded an F&O contract. Across FY26 as a whole, only about 20 lakh people… <a href="https://t.co/aZbzItQb4P">pic.twitter.com/aZbzItQb4P</a></p>— Nithin Kamath (@Nithin0dha) <a href="https://twitter.com/Nithin0dha/status/2046944741955441138?ref_src=twsrc%5Etfw">April 22, 2026</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8">

Kamath recently commented that the latest increase in securities transaction tax (STT) by the government on equity derivatives will unlikely curb speculation in F&O and could instead deepen structural problems in the market.

He called the policy flawed if the intention was to rein in speculative trading. According to him, the tax increase disproportionately affects futures trading, while speculative activity in India is overwhelmingly concentrated in options.

Also read: Nithin Kamath warns STT hike may not curb F&O speculation, instead hits trading volumes

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