Zerodha's Nithin Kamath in a post on X said around 60-70 per cent of futures and options turnover comes from just 1-2 per cent of traders, calling it a lopsided structure in Indian markets. Citing the April Market Pulse report by NSE, he added that despite concerns around F&O trading in India, it remained a relatively small segment. 

According to NSE, the number of investors participating in the cash market segment declined to 3.58 crore in FY26 from 3.77 crore in FY25. A similar moderation was seen in equity derivatives, where participation fell to 85 lakh from 1.06 crore in the previous year.

Only about 30 lakh investors traded an F&O contract in March, Kamath noted.

"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," Kamath said.

He said that there were 12.91 crore registered investors (Unique registered PANs) as of March 31, 2026. Of these, only 3.79 crore, or 29.4 per cent, traded in the cash or derivatives market at least once during the financial year.

Among them, just 85 lakh investors traded futures or options at least once during the year, he said, adding that 76 per cent of these participants also traded in the cash market.

Of the 85 lakh F&O participants, 21 lakh traded solely in F&O without investing in the cash market, accounting for just 1.6 per cent of the total investor base.

"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 said.

"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," he said.

What NSE data suggests
NSE data, as Kamath pointed out, suggested that the total number of individual investors who traded at least once during the year decreased to 3.79 crore in FY26, compared to 3.97 crore in FY25. This decline was primarily driven by a sharp drop in the cohort of investors active in both cash market and equity derivatives, with their numbers falling from 85 lakh in FY25 to 64 lakh in FY26. 

"In contrast, the number of investors trading exclusively in either the CM or the equity derivatives segment remained largely stable during the year. Notably, a significant proportion (76%) of equity derivatives participants also engage in the CM segment, indicating considerable overlap between the two," the data showed.

NSE data showed the base of active individual investors, who traded at least once during the year, expanded significantly from 46 lakh to over 3 crore, with growth especially pronounced in the cash market segment. 

"This expansion reflects the broader financialisation of household savings, improved digital access to trading platforms, and growing investor comfort with exchange-traded instrument," NSE's report suggested.