SEBI’s latest data shows that India’s individual F&O trading base shrank dramatically in FY26. The number of unique individual investors fell from 98.10 lakh in FY25 to 78.60 lakh in FY26, 19.5 lakh traders gone in just twelve months. Over the same period, net losses fell from ₹1,11,788 crore to ₹91,685 crore, while turnover declined from ₹213 lakh crore to ₹202 lakh crore. The data, covering roughly 90% of individual investors through the country’s top 15 brokers, points to a clear shift in retail participation. But the bigger question is not how many people left.
It is where their money went.
First, the detail that got buried
Losses fell 18%. The average loss per trader rose, from ₹1,13,913 to ₹1,16,654.
The aggregate improved because fewer people were losing, not because the survivors got better.
SEBI’s July 2025 study explains who left. Comparing December–May across two years, traders with turnover under ₹10,000 fell 30%. The ₹10,000–₹1 lakh bracket fell 22%. But the ₹1 crore–₹10 crore bracket fell just 4%.
The people who quit F&O were, overwhelmingly, the smallest accounts, the ones trading a few thousand rupees a week. The serious money stayed. So when we ask where 20 lakh people went, we’re mostly asking where a large number of small, speculative, loss-making balances went.
There are four documented answers, and they are not equally comfortable.
Destination 1: Nowhere at all
This is the largest single answer, and the least discussed.
NSE’s active client base fell from 4.92 crore in March 2025 to 4.57 crore in March 2026, a drop of roughly 35 lakh accounts, about 7%, the first annual contraction in three years. Three brokers accounted for over 70% of it: Zerodha lost 9.95 lakh active clients, Angel One 8.15 lakh, Upstox 7.6 lakh.
For context, the Nifty 50 fell 5.1% and the Sensex 7.1% during FY26.So the exit from F&O was not, for most people, a rotation into something better. It was an exit from the market. Account dormancy, not asset allocation.
Destination 2: Gold and silver, the loudest trail
This one is measurable, and it is enormous.
| Metric | FY26 |
| Gold ETF net inflows | ₹68,868 crore |
| Gold ETF inflows, FY21–FY25 combined | ~₹30,200 crore |
| Gold ETF AUM | ₹59,000 crore (Mar 2025) → ₹1.71 lakh crore (Mar 2026) |
| Silver ETF net inflows | Over ₹30,000 crore |
| Gold + silver share of total ETF inflows | 55% (₹99,280 crore) |
| Equity ETF inflows | ₹77,780 crore (43%) |
Total ETF inflows hit a record ₹1.81 lakh crore in FY26, more than double the previous peak of ₹83,390 crore in FY22. For the first time, commodity ETFs pulled in more money than equity ETFs.
SEBI’s own annual report links the two trends, attributing part of the 6.8% decline in cash equity turnover (to ₹280 lakh crore) to retail savings moving toward gold and silver.
The caveat that matters: inflows followed returns, not the other way around. Gold and silver rallied first; the money arrived after. A trader who swapped weekly options for gold ETFs did not become a long-term investor, they changed the instrument, not necessarily the reflex.
Destination 3: The slow lane
Some genuinely did convert, and the evidence is real.
Monthly SIP contributions hit a record ₹32,087 crore in March 2026, with SIP AUM at ₹16.85 lakh crore by April. Domestic institutional investors absorbed ₹8.5 lakh crore of net inflows in FY26 against foreign portfolio outflows of ₹1.8 lakh crore. Delivery-based buying rose measurably: the delivery-to-traded quantity ratio climbed to 29.3% from 23.6%, and delivery-to-traded value to 27.4% from 24.4%. Demat accounts reached 22.5 crore.
But the honest footnote: AMFI’s SIP stoppage ratio crossed 100% in both March and April 2026, more SIP accounts were discontinued or matured than were registered. The money grew; the account count didn’t. And no dataset links a specific departing F&O trader to a new SIP. Anyone claiming that link is guessing.
Destination 4: The same trade, a different address
Regulation displaces behaviour more reliably than it dissolves it.
Indian crypto turnover is running near $5 billion a day, against an estimated $2.1 billion in total Indian digital-asset holdings as of end-May 2026. That gap is not investing, it is churn. Derivatives now make up at least 80% of volume on domestic crypto exchanges, and roughly 72.7% of India’s crypto trading volume has migrated offshore since the 30% tax and 1% TDS regime took effect in 2022.
Meanwhile, real-money gaming was banned in August 2025; opinion-trading platform Probo shut its India operations that same month after ED searches. Zerodha’s own analysis of the data notes that India’s domestic speculative infrastructure outside F&O is now “banned, taxed to irrelevance, or trivially small”, and that after the gaming ban, activity appears to have migrated to illegal offshore apps.
Which is the problem with celebrating the number. Offshore apps don’t file returns with SEBI. The ₹20,103 crore reduction in documented losses is real. Whether it represents money saved or money lost somewhere unmeasured is a question no Indian dataset can currently answer.
What this actually tells you
SEBI’s intervention worked on the metric it was designed to move: fewer small traders, smaller aggregate losses, more delivery-based ownership. That is a genuine win, and it is worth about ₹20,000 crore a year to Indian households.
But the per-trader loss still rose. Thirty-five lakh accounts went quiet rather than getting smarter. And the most speculative rupees appear to have found venues with no disclosure requirements at all.
The real test of the F&O clean-up isn’t the FY26 exit number. It’s whether FY27 shows those people building something, or just losing it somewhere we can’t see.
Disclaimer: This blog is for educational and informational purposes only and does not constitute investment or financial advice. Data cited is from SEBI’s FY26 annual report, SEBI derivatives studies, AMFI, NSE and Government of India replies in Parliament. Please consult a SEBI-registered financial advisor before making investment decisions.
Contributor: Team Leveraged Growth
