Trading

India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), has raised red flags over the soaring growth of derivatives trading, highlighting potential systemic risks tied to retail investor exposure and the imbalance between derivatives volumes and cash market depth. The sharp rise in index options trading—driven largely by short-term speculation—has led SEBI to call for a reassessment of market structure and investor protections.

CoinDCX to Strengthen Indian Operations with 90 New Hires Amid Crypto Market Headwinds

A recent analysis by the Securities and Exchange Board of India (SEBI) has shed light on an unsettling reality in the Indian financial landscape—retail investors collectively lost over Rs. 1 lakh crore in the derivatives segment during FY25. Despite a record surge in participation, particularly in index options, the majority of these investors exited their trades in the red. The findings raise critical concerns about financial literacy, speculative behavior, and systemic risks in one of the fastest-growing segments of India’s capital markets.

A recent Securities and Exchange Board of India (Sebi) report highlights that nearly 91% of individual traders faced losses in the equity derivatives segment during fiscal year 2025, mirroring a similar pattern from the previous year. The aggregate net losses surged 41% year-on-year, reaching Rs 1,05,603 crore. Concurrently, the number of unique individual investors declined by 20% compared to FY24, although it showed a 24% increase from two years ago.

Indian stock markets closed flat on Monday amid heightened volatility, as investors remained cautious ahead of a crucial U.S. tariff deadline. The Sensex edged up by just 9.61 points to settle at 83,442.50, while the Nifty ended unchanged at 25,461.30. Concerns surrounding the reimplementation of Trump-era tariffs and foreign fund outflows kept market sentiment subdued. Gains in select blue-chip stocks were offset by weakness in others, as global cues, especially from Asia, remained mixed.

Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey has downplayed the likelihood of other major market manipulations following a landmark ban on New York-based hedge fund Jane Street, which earned ₹4,844 crore through alleged index manipulation. Pandey emphasized that the episode highlighted surveillance gaps, not regulatory inadequacies, signaling a focused upgrade of monitoring systems rather than blanket rule changes.

Nithin Kamath, founder and CEO of Zerodha, has raised serious concerns about the possible repercussions of proprietary trading firms scaling back their operations in India, particularly in the wake of market regulator SEBI’s recent action against Jane Street. The New York-based hedge fund, accused of market manipulation, has been barred from Indian markets and had Rs. 4,843 crore in gains impounded. With Jane Street contributing nearly half of all options trading volumes, its exit could significantly disrupt retail activity, which accounts for approximately 35% of the segment.

The Securities and Exchangge Board of India (Sebi) has escalated recovery efforts against fugitive diamantaire Mehul Choksi, ordering the attachment of his bank accounts, shares, and mutual fund holdings to recover outstanding dues of Rs 2.1 crore. This follows Choksi’s failure to pay a penalty imposed for insider trading violations related to Gitanjali Gems shares. Once chairman and managing director of Gitanjali Gems and implicated in the Rs 14,000 crore Punjab National Bank fraud alongside Nirav Modi, Choksi has been evading Indian authorities since 2018.

India’s premier electricity trading platform, the Indian Energy Exchange (IEX), reported a robust 14% year-on-year increase in power trade volumes for May 2025, reaching 10,946 million units (MU). This growth was driven by record activity in the Real-Time Market and a surge in green energy trading. Renewable Energy Certificates (RECs) also saw a 65% spike in trading volumes. Despite rising volume, market clearing prices fell sharply across most segments, reflecting increased supply and improved grid efficiency.

A 43-year-old private sector employee from Alwal fell victim to a sophisticated online stock trading scam, losing over Rs 70 lakh. The cyber fraudsters, posing as representatives of Zerodha, a legitimate trading platform, lured the victim into transferring substantial sums under false pretenses. The scam, which lasted almost a month, included deceptive transactions and fake profit returns to build trust, before demanding additional payments as "tax fees." The fraud was uncovered only when the victim sought help from the genuine Zerodha office, prompting a police investigation.