India’s growing cult of derivatives trading, in charts

livemint.com:

Also read: Mint Primer: When the tail wags the dog: Futures & options Retail investors currently have over a one-fourth share in turnover in equity derivatives—with nearly 35% in index options, followed by 31% each in index futures and stock options. But proprietary traders (brokers trading with their own money rather than clients’) remain the biggest investors, and their share has been consistently rising.

More sophisticated investors such as foreign institutional investors have also been tightening their grip over derivatives. However, dabbling in derivatives can prove risky as it can easily turn into a weapon of mass destruction.

Many individuals lack the expertise to deal with this segment. A Sebi study in January pointed out that nine out of 10 investors lose money in F&O trading, and senior citizens suffer the most.

“The sustained interest in F&O trading, despite significant losses and regulatory warnings, underscores the allure of market rallies and zero-day options (a one-day bet)," said Satish Menon, executive director, Geojit Financial Services. “While this trend may persist, the Sebi report's revelation should act as a collective wake-up call.