Indian Stock Market Trading Plunges: Retail Investors & F&O See Sharp Decline

• Indian stock market trading volumes, both cash and derivatives (F&O), saw a significant decline in 2025, marking the biggest slump since 2013 for F&O and a three-year low for cash.
• Cash market turnover dropped by 16% due to common investors' reduced participation, driven by poor returns, high volatility, and fear of capital getting stuck.
• Derivatives trading fell by 17% for the first time since 2013, primarily due to SEBI's stricter regulations, including increased lot sizes, higher margins, and reduced weekly expiries.
• Retail investors withdrew due to continuous FII selling, high valuations, global tensions, and the burden of increased taxes and brokerage charges.
• Despite Sensex and Nifty rising by 10%, the broader market remained weak, with MidCap flat and SmallCap down 9%, impacting most small investors' portfolios.

Why It Matters: Indian stock market's true health is challenged by declining retail participation and F&O volumes despite index gains.