India’s derivatives market often makes headlines for its rapid growth and rising risks. But according to Zerodha founder and CEO, Nithin Kamath, the reality is quite different. Despite the buzz, only a small fraction of investors are actually trading in futures and options (F&O).
Kamath pointed out that when compared to the overall investor base.
“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,” he wrote on X.
In March alone, only around 30 lakh people traded an F&O contract. For the full financial year FY26, the number drops further, with about 20 lakh individuals trading exclusively in F&O.
Even when combining equity and F&O traders, the total comes to roughly 64 lakh. This is a small slice when placed against India’s expanding investor universe.
India now has nearly 13 crore unique investors. However, only about 3.8 crore of them were active in either the cash or derivatives segment. “That means only about 30% of investors traded anything at all,” Kamath explained.
This suggests that a large number of people may have demat accounts but are not regularly participating in the markets.
What stands out even more is how concentrated trading activity has become.
“And yet, the only reason broker revenues have held up is that a small number of people are trading more,” Kamath said.
In simple terms, a limited group of highly active traders is keeping the broking industry’s revenues steady.
The imbalance becomes even sharper in the derivatives segment.
“If you look at F&O turnover, around 60–70% of trading volumes come from a tiny set of investors, roughly just 1–2%,” Kamath said.
This means a very small group dominates trading volumes, while the majority remains on the sidelines.
Kamath’s observations highlight a key reality: while India’s stock market is growing fast, active participation is still concentrated among a few.
The data also raises questions about risk concentration, investor awareness, and the long-term sustainability of a market where a small group drives most of the activity.
For now, the takeaway is simple. The F&O market may look big on the surface, but in reality, it is still a niche space dominated by a handful of active traders.