# India's Proprietary Trading Firms Saw Derivatives Profits Fall to 4.7 Billion Dollars

> Gross profit for prop trading firms in Indian equity derivatives slipped nearly 3 percent in the year through March as regulatory curbs cooled speculative activity, even as the firms remained the market's biggest winners while retail traders kept losing.

- Source: Continental
- Canonical URL: https://continental.today/article/india-prop-traders-derivatives-profits-fall
- Author: Continental Newsroom
- Section: Markets
- Published: 2026-08-22T17:09:29.000Z
- Updated: 2026-08-22T17:09:29.000Z
- Tags: India, Derivatives, SEBI

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Proprietary trading firms in India saw their gross profit from equity derivatives fall to about 445 billion rupees, or roughly 4.65 billion dollars, in the year ended in March, according to a study published by the Securities and Exchange Board of India. That marked a decline of nearly 3 percent from the 460 billion rupees the same group of firms earned the previous financial year.

The decline follows a series of curbs regulators introduced to cool speculative trading in India's derivatives market, including larger contract sizes, tighter position limits and other safeguards aimed at limiting excessive retail participation. India's central bank has separately tightened funding rules for proprietary trading firms and stock brokers, adding another layer of restriction on activity in the space.

Despite the drop, proprietary trading firms remained the biggest winners in India's derivatives market, continuing to profit even as retail traders kept losing money overall, a pattern that has persisted for several years running. The gap between professional and retail outcomes has been one of the recurring findings in SEBI's studies of the market, and this year's data shows that gap narrowing only slightly rather than closing.

The restrictions introduced in late 2024 have coincided with a prolonged stretch of underperformance in Indian stocks relative to other markets in the region, and trading volumes on India's largest exchange have fallen sharply as a result of the tighter rules. Regulators have generally treated that slowdown as an acceptable tradeoff for reducing the kind of speculative retail losses that drew public criticism.

For proprietary trading firms, a nearly 3 percent decline in profit is a meaningful but not dramatic pullback, evidence that the curbs have dented the market's overall activity without eliminating the structural edge professional firms hold over individual traders. Whether SEBI tightens the rules further will likely depend on how retail losses trend in the data it publishes over the coming year.

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Originally published by Continental. Free to cite with attribution and a link to https://continental.today/article/india-prop-traders-derivatives-profits-fall.