India Not The Biggest Derivatives Market, Says NSE CEO

Ashishkumar Chauhan, the managing director and chief executive officer of National Stock Exchange, said that India is "not the biggest" derivative market, during his address at NDTV Profit's Diwali special event 'Ignite'.

He added that the value traded in options is one-fifth of futures in the local markets and that he can already see the number of people trading in derivatives decreasing.

Chauhan also warned individual investors to avoid trading in futures and options without thorough knowledge.

"Even though I helped bring derivatives to India, they are very sophisticated. Investors should not enter the derivatives market unless they fully understand it," he stated

He emphasised that short-term trading, such as buying in the morning and selling by afternoon, cannot be considered true investing.

Chauhan’s warning underscores the risks of derivatives trading, supported by the recent SEBI data showing that the majority of individual F&O traders suffered losses.

In July, the Securities and Exchange Board of India released a study which found that nine out of 10 individual F&O traders suffered losses in fiscal 2025. The total net losses for these traders jumped 41% from Rs 74,812 crore in the financial year ending March 2024, to Rs 1.06 lakh crore in the previous financial year.

The findings highlight the importance of risk awareness, financial discipline, and avoiding excessive leverage

The SEBI report also showed that the number of active individual F&O traders declined from roughly 61.4 lakh in the first quarter of FY25 to 42.7 lakh in the final quarter. The largest drop in participation was seen among traders with total turnover below Rs 1 lakh.

Chauhan highlighted that leverage is the main risk in derivatives trading. He advised investors to prioritise financial security—owning a home, obtaining insurance, and maintaining fixed deposits—before committing even a small portion of their net worth to market instruments.