According to The Economic Times, Zerodha founder and CEO Nithin Kamath highlighted that India's F&O market remains relatively small despite widespread perception. In March alone, only about 30 lakh individuals traded F&O contracts, while across FY26, roughly 20 lakh traded exclusively in derivatives. When combining equity and F&O participants, the number rises to just around 64 lakh, representing a fraction of India's nearly 13 crore investor base. As Kamath emphasized on Twitter, "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."
As reported by The Economic Times, Kamath pointed out that only 3.8 crore investors were active across segments, implying that just 30% of investors actually traded. He emphasized that the data suggests that while retail participation has expanded, trading intensity—and consequently revenues—are driven by a very narrow base of investors. The market structure shows that despite the large investor base, actual trading activity remains concentrated among a small percentage of participants. According to Kamath's latest Twitter post, "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."
According to The Economic Times, Kamath emphasized that brokerage industry revenues are heavily dependent on a small set of active traders, with a disproportionate share of activity concentrated at the top. He noted that around 60–70% of F&O volumes are generated by just 1–2% of traders, reflecting a sharply imbalanced market structure. As Kamath explained on Twitter, "If you look at F&O turnover, around 60–70% of trading volumes come from a tiny set of investors, roughly just 1–2%. That is the lopsided structure of the Indian markets." This concentration means that the entire revenue pool of the broking industry comes from this relatively small pool of traders.
Recent market analysis reveals concerning implications of this concentration pattern. As reported by multiple sources, the data suggests that India's derivatives markets are far more dependent on a small, highly active liquidity cohort than headline participation numbers suggest. This creates three critical implications: broker revenues are increasingly tied to trading intensity per user rather than broad-based participation growth, regulatory tightening disproportionately impacts industry revenues due to concentrated activity among a very small base, and India remains underpenetrated from a true capital market participation standpoint. The analysis highlights that India's markets are still in the "financialization of savings" phase, not yet the "mature investing culture" phase, with the real long-term opportunity potentially lying in deeper household participation in equities, SIPs, and wealth creation assets.
