How India's F&O landscape is changing rapidly

A friend told me about an employee at Vijay Sales who made ₹1,000 profit from Options trading on the day of his visit for buying a TV. The employee was happy and was showing various TV models to my friend cheerfully.

My friend is smart. He asked the employee weather he knows how much he made from trading in the entire year. The employee had no clue. And when they checked his profit and loss statement, he had made substantial losses in the full year. Unfortunate for the employee that my friend was smart and ruined his current mood for a better future.

The Futures & Options (F&O) world is on the brink of a major change for retail investors like us in India.

Sebi’s recent crackdown has brought a wave of change to options trading. Over 90% of individual traders in the derivatives market lost money last year, with a staggering ₹42,790 crore lost by people earning under ₹5 lakh.

Options have now become tougher for small investors for a good reason. With Sebi’s new rules—higher contract sizes, reduced weekly expiries, and more stringent margins—many retail investors are rethinking options.

We’ve already seen a decline in options trade size and a slight increase in equity cash trades. In September, the average trade size in the cash segment rose 1.6% to ₹30,156, while in options, it dropped. This signals a shift, a move towards real equity investment over speculative bets.

As options become less accessible, we may see higher participation in the equity cash segment. For us retail investors, this could mean a focus on real value, building portfolios with long-term stocks, not just chasing short-term gains.

The tide is changing, and it might be a chance for you to shift too. I have made my move and have focused 99% of my portfolio to the cash equity segment for long-term investing. Are you in too to create wealth together?