Cheap trading, easy mobile access and weekly expiries drew millions of Indians into derivatives, but heavy losses and tighter rules have cooled the boom.
India built the world’s largest equity-options market by contracts traded, drawing millions of retail investors into short-dated bets through cheap mobile trading and weekly index expiries.
In 2023, Indian investors traded about 85 billion options, while the market accounted for roughly 84% of global volume, according to Futures Industry Association data.
The boom reached small towns such as Gangapur, where traders crowded around phones and used social media and YouTube as classrooms.
Low premiums made it possible to double or lose money within minutes, turning options into what one market observer called a legal casino in a pocket.
The losses were severe. India’s market regulator, SEBI, found that nine out of 10 individual futures-and-options traders lost money, averaging about 128,000 rupees a year. Retail traders lost more than 500 billion rupees in fiscal 2023.
SEBI responded by raising contract sizes, limiting weekly expiries and later accusing Jane Street of manipulating indexes, allegations the firm denies and is challenging. Options volumes fell 30% to 40% by early 2025 as the market shifted toward larger, more institutional participants.
