New iOS in Markets - Indian Options Speculators.
There has been a huge surge in Retail and Proprietary trading in Options and more specifically in Index Options.
The Data & Charts below are just Crazy and getting crazier.
1) Retail Participation went through the roof in 2021
- Some Moderation now in 2022-2023
- Retail in Cash Market From 3 cr in Jan 20 to 11.7 cr in 2021.
- Retail at 3.2 cr participants March 23.
- 3x jump in all participation from Jan 20 !!
2) Everyone is an Option Trader
- FIIs are just 9.5% of Index Options Premium Turnover !!! From 21% in Fy20.
- 45% is Domestic Prop ( Broker trading on its own behalf )
- 35% is Retail.
- Retail + pro = 80%
- Retail is almost 4x of FIIs.
- Btw FIIs own 20% of India.
3) Pro are propping up the Trading Volumes in Equity Derivatives .
- On a notional turnover, 53% of the Volumes is PRO accounts.
- Brokers are now Traders or Traders have turned Brokers ?
- FIIS are just 7.4%
- Retail at 27%
4) The Indian Options Speculator is an Indexer
- For all the talk about Index Funds & ETFs the data suggests Retail is all in on Index Futures instead.
- 31.7% of Index Futures is Retail and 34% is PRO
- FIIs at 11.8%
5) Retail is shifting from Futures to Options
- StockFutures sees a major cut in Retail participation.
- From 31% of Volumes in 2018 to just 15.6% in 2023.
- FIIs continue to be at 23-25%
- DIIs at 8.5% thanks to the ArbitrageFunds and TaxBenefit.
6) Stock Options is all about the PRO and Retail
- 56% of Volumes by PRO and 31% by Retail.
- FIIs are just 3.1 % .
- Repeating, FIIs are just 3.1% of Stock Options ( Premium Turnover )
7) The Machines are fighting it out.
- 51.5% of Volumes of Equity Derivatives and 33% of Cash Market is via Co-Location.
- 17% of trades via a Mobile in cash Market. It peaked at 25% in 2021 !!
8) Capital Market still has FIIs DIIs and Retail slugging it out.
- PRO is 27%
- Retail is 36.5% from a peak of 45% in FY21.
- FIIs at 15%
9) Couple of odd ones
- SURAT just beat the Rest of India in terms of Cash turnover of Individuals in March 23 with 6.3% of Volumes !!!
- Mumbai continues to be the largest
- Equity Market AUM crosses Debt Market in Mutual Funds
10) Retail participation is increasing in a big way. More in Option Selling
- Mind you Leverage is the toughest way to make money and the easiest to Lose it All.
- I just hope a lot of Retail does not have to learn this lesson in a tough way with Volatility going berserk.
A lot of things are not in your Control.
Outages can be everywhere.
- Broker
- Exchange
- Bank
- War
A lot can create volatility. Remember a 15 min Lower circuit in 2012 due to a Freak order by a Broker.
Control your Size and Leverage. Be conservative.
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