Zerodha defends F&O access as SEBI flags ₹91,685 crore in FY26 retail trader losses

Zerodha co-founder Nithin Kamath said the broker does not use dark patterns to push F&O or margin trading, as SEBI reported 87.7% of individual derivatives traders lost money in FY26. Kamath expects tighter rules and highlighted diversification into insurance, lending against securities and asset management.

— Source published Fri, 21 Aug, 2026, 19:18 IST · First seen Fri, 21 Aug, 2026, 19:27 IST · Source NDTV Profit

What happened

Zerodha’s Nithin Kamath defended offering F&O and margin trading without promotional dark patterns as SEBI reported steep FY26 retail trader losses. He expects

Key facts

  • 87.7% of individual F&O traders lost money in FY26
  • Individual traders lost Rs 91,685 crore in equity derivatives in FY26
  • Active F&O participants fell 18% to 87.5 lakh
  • Options accounted for 92% of individual losses
  • Average loss among loss-making traders was Rs 1.47 lakh
  • 88.5% of traders under 30 incurred losses
  • 73% of traders had annual incomes below Rs 5 lakh

Why this matters

Zerodha’s moves into insurance, lending against securities and asset management signal attractive partnership or acquisition targets as brokers diversify beyond transaction-led trading income.

What to watch

  • SEBI consultation papers on F&O eligibility, minimum contract values, margin norms, position limits or suitability assessments.
  • New requirements governing broker app nudges, derivatives risk warnings, influencer/referral marketing or loss reporting.
  • Monthly exchange data showing a material decline in individual F&O participation, premium turnover or active clients after prior rule changes.
  • Zerodha disclosures or hiring/product launches in insurance, LAS, asset management, fixed income or wealth products.
  • Evidence that brokers raise fees, reduce free tools or limit options strategies in response to compliance and volume pressure.
  • Zerodha is likely to emphasize its no-dark-pattern positioning, expand investor education and make risk disclosures more prominent across derivatives journeys.
  • The broker is likely to prioritize cross-selling of mutual funds, bonds, insurance, lending against securities and asset-management offerings to reduce transaction-revenue concentration.
  • SEBI may seek additional broker-level data on repeat retail losses, client concentration, margin funding, option turnover and digital solicitation practices.
  • Competitors with high F&O dependence may cut acquisition incentives, revise app flows and increase compliance spending before formal rule changes.