Youth dominate India's derivatives market, but face steep losses: Sebi

India's derivatives market has undergone a marked demographic shift, with traders under 30 now comprising 43 per cent of individual participants in the fiscal year ended March 2026, up sharply from 31 per cent just four years earlier, according to research by the Securities and Exchange Board of India.

The expansion reflects a broader democratization of the retail derivatives segment, which has increasingly attracted participants from smaller cities and lower-income brackets. However, the growth masks a troubling undercurrent: younger investors are recording substantially higher loss rates.

The Sebi study found that approximately 89 per cent of traders below age 30 were loss-makers in FY26, compared to 81 per cent of participants above 60. This performance gap underscores the risks facing inexperienced market participants who may lack the knowledge or discipline required for derivatives trading.

Income analysis revealed a similar pattern of concern. About three-fourths of individual derivatives traders earned less than Rs 5 lakh annually, with this cohort accounting for 43 per cent of overall turnover but 53 per cent of aggregate losses. Some 88 per cent of traders in this lower-income bracket incurred losses, the regulator noted.

The findings highlight growing concerns about retail participation in derivatives markets, prompting regulators to examine whether adequate investor education and protective measures are in place for India's increasingly young and less-experienced trader population.