Proprietary traders' derivatives profits fall in FY26, says Sebi study

Proprietary traders' gross profits from India's equity derivatives segment declined 3 per cent year-on-year to Rs 44,483 crore in FY26, according to a study released by the Securities and Exchange Board of India (Sebi).

Prop traders had recorded gross profits of Rs 45,955 crore in FY25. The decline came amid lower gross profits across most non-individual investor categories.

Gross profits of foreign portfolio investors (FPIs) fell 55 per cent year-on-year (YoY) to Rs 13,896 crore in FY26. Mutual funds, partnership firms and limited liability partnerships (LLPs), and corporates saw their gross profits decline 54 per cent, 38 per cent and 22 per cent, respectively, the Sebi study said.

Meanwhile, individual traders' gross losses in equity derivatives declined 26 per cent to Rs 72,243 crore in FY26 from Rs 97,882 crore in FY25.

The proportion of individual traders who incurred net losses also declined to 87.7 per cent in FY26 from 90.9 per cent in FY25 and 91.1 per cent in FY24. Even so, nearly nine out of 10 individual traders continued to report net losses in the equity derivatives segment.

Participation among individual traders also declined during the year. The number of active individual traders fell around 20 per cent to 78.6 lakh in FY26 from 98.1 lakh in FY25.

Options account for bulk of profits, losses

Options continued to account for the majority of both proprietary traders' gross profits and individual traders' gross losses.

According to the Sebi study, options contributed about 98 per cent of proprietary traders' gross profits in FY26. More than 90 per cent of individual traders' gross losses also came from the options segment.

The study also highlighted regulatory measures introduced during FY25 in the equity derivatives segment. These included restricting weekly derivative contracts to one index per exchange, increasing minimum contract sizes, requiring upfront collection of options premiums and introducing additional risk-management measures.

Sebi said these measures were introduced to strengthen risk management in the derivatives market.