Jane Street versus the public: F&O trade falling, but individuals keep losing
On the other side of these trades by firms such as Jane Street were India's retail traders, who have bled heavily in recent years. According to a new study by the markets regulator using data from the top 13 stock brokers, individual traders' losses in equity derivatives in 2024-25 (FY25) widened by 41 per cent to Rs 1.06 lakh crore, from Rs 74,812 crore in 2023-24 (FY24).
Meanwhile, in FY24, the gross profit of proprietary trading firms from equity derivatives rose to Rs 33,037 crore, or 44 per cent of the losses incurred by retail traders that year. It was amid these contrasting fortunes – and Jane Street's April 2024 legal battle in the US over what it said was its confidential and 'most profitable' trading strategy – that Sebi began looking into the firm's activities for any market abuse.
According to the data released by Sebi on July 7, the number of unique traders decreased 20 per cent year-on-year between December 2024 and May 2025 compared to a 24 per cent growth between December 2023 and May 2024. And while losses of retail traders increased in FY25, the final quarter of the year was better, although only in relative terms.
As per the Sebi study, net losses of individual traders in the equity derivatives segment fell to Rs 24,745 crore in the March quarter of FY25, down 26 per cent from a net loss of Rs 33,631 crore in the previous quarter ended December 2024. However, the proportion of traders making losses in the January-March quarter remained elevated at 86.4 per cent, slightly lower than 88.5 per cent in October-December 2024, but higher than 84.5 per cent in April-June quarter of FY25.
Even more worryingly, the average loss per retail trader in the last quarter of FY25 stood at Rs 57,920 compared to Rs 34,606 in the first quarter of the financial year. This suggests that those traders who decided to stay in the market made even larger losses.
Markets regulator Sebi, however, cautioned that it may be difficult to attribute the fall in trading activity to the measures it began rolling out starting November 2024 to strengthen the equity derivatives framework 'given that multiple variables and factors may be behind any variation in volumes'.
Trading activity in futures and options has declined substantially in recent months.
From a peak of 1.29 lakh crore in October 2024, the total number of futures and options contracts traded on the National Stock Exchange (NSE) fell nearly five times to 262 crore in May, according to data from the World Federation of Exchanges.
The Sebi's interim order against Jane Street last week has had its own impact. According to NSE data, 5.12 crore F&O contracts were traded on July 8 with a total turnover of Rs 91.82 lakh crore. Both these figures were down 6 per cent from a week ago. Compared to July 9, 2024 – also a Tuesday – the number of contracts traded on July 8, 2025 was down 88 per cent, while the turnover was 74 per cent lower.
In the long run, a fall in overall F&O trading may not necessarily be a good thing.
'Prop trading firms like Jane Street account for nearly 50 per cent of options trading volumes. If they pull back – which seems likely – retail activity (~35 per cent) could take a hit too. So this could be bad news for both exchanges and brokers. The next few days will be telling. F&O volumes might reveal just how reliant we are on these prop giants,' Nithin Kamath, founder and CEO, Zerodha, one of India's largest brokerages, posted on X on July 4.
Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy.
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