India’s F&O Market is 20x Larger Than Others
A fascinating chart shared by Anurag Pagariya highlights the staggering dominance of India’s F&O contracts, showing that the number of contracts traded in India is 20 times more than in other established markets like the US, Brazil, and Korea.
Why is India’s F&O Trading So High?
This raises an important question—why is derivatives trading exploding in India? While India’s population is large, the number of demat accounts (10–15 crore) is not significantly higher than in the US or other developed markets. Yet, the F&O activity here is exponentially greater. One possible reason is that contract values in the US and other markets tend to be larger, while in India, the lot sizes and margins are relatively lower. However, this alone doesn’t explain a 20x difference.
The Quick Money Illusion
The lure of F&O trading has drawn in many first-time traders, fueled by social media hype, influencer culture, and quick-money expectations. The past 3–4 months of market turbulence, however, have served as a harsh reality check for many.
History Repeats Itself in Every Bull Run
For seasoned market participants, this is nothing new. In 2000 and 2008, similar euphoric phases saw people leaving jobs to trade full-time, only to return when reality hit hard. Many jumped in thinking 15–20% returns from their profession were too slow and that 50%+ returns in F&O were a sure bet—only to realize that sustainability in trading is far more challenging than expected. The recent correction phase has tested every trader, and those without a system or discipline are now exiting the market, realizing that their previous stable income was more reliable.
F&O Frenzy Will Cool Down
This FOMO-driven trend will likely cool off over time. Many inexperienced traders will exit, while a handful who manage risk, follow systems, and treat trading as a profession (not a shortcut) will survive. Regulatory changes—higher margins, increased contract sizes, and stricter eligibility norms—are already making it tougher for casual traders. Over time, the Indian market will still have higher F&O activity than others, but not at the unsustainable levels seen today.
Who Will Survive the Next Cycle?
The market has its own way of filtering out impulsive participants, and once this phase is flushed out, a new cycle will emerge. The question is—who will survive to trade in the next cycle? What are your thoughts on this F&O explosion? Have you seen traders around you getting burnt out? Let’s discuss in the comments.
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