The global exchange-traded derivatives market experienced a notable decline in volume in Q1 2025 compared to the same period last year, largely due to a fall in the number of equity options contracts traded on exchanges in India.
FIA data shows that in the first three months of 2025, worldwide volume of exchange-traded derivatives was 27.52 billion contracts, down 42.5% from the first three months of 2024. Most of that decrease came from equity contracts. While futures volume in Q1 was up 12% at 7.15 billion contracts traded, options volume fell by a whopping 51% from the previous year from 41.11 billion contracts to 20.38 billion contracts.
Total volume on India’s two financial derivatives exchanges fell from a peak of 16 billion contracts in October 2024 to 4 billion in March, the data shows.
“Recent government crackdowns on retail speculation have led to a 75% drop in options trading on Indian exchanges in just five months. This substantial decrease has had a profound impact on global volumes,” said Will Acworth, FIA’s global head of market intelligence, speaking on a webinar earlier this month on Q1 trends in global ETD markets.
April trending down
FIA’s most recent volume data shows April followed this year-over-year downward trend. Worldwide volume of exchange-traded derivatives was 9.48 billion contracts last month. While this was up 2.3% from March – boosted by a rise in futures trading – it was down 37.5% from April 2024. Global trading of options fell to 6.66 billion contracts during April, down by more than 47% from April last year, again with most of that decline taking place in India. Conversely, global trading of futures reached 2.82 billion contracts in April, up 13.5% from the same month last year.
The decline in volumes in India follows a concerted effort by the Securities and Exchange Board of India, the nation’s financial regulator, to raise barriers to trade options late last year after becoming concerned about millions of Indians entering the market to try to quickly profit from the country’s soaring stock market.
According to SEBI, 90% of active retail traders were losing money trading derivative contracts as they came up against larger, better funded and more experienced financial market players. For example, Jane Street, a quantitative trading firm based in the US, generated more than $2.3 billion in net revenue from equity derivatives last year in India, accounting for 10% of the firm's global trading revenue, according to recent media reports.
India’s finance ministry also said that the rise in retail engagement was largely motivated by “humans’ gambling instincts” and warned that the “frenzy” could hinder efforts to channel household savings for productive uses.
SEBI’s crackdown late last year included raising the minimum contract size on index derivatives by nearly three times to Rs1.5mn ($17,300), limiting trading of weekly options contracts to one per exchange, collecting options premium upfront and reducing the number of strike prices.
Profit hit
While the measures taken to reduce excessive speculation could lead to healthier market practices in the long run, the immediate drop in volumes has started to hit brokerage groups and exchanges that had profited handsomely from the trading boom.
Angel One, for instance, one of India’s largest brokerage houses, is now facing headwinds due to the tighter SEBI regulations. In an earnings call, it said its profits in the January-March 2025 quarter dropped nearly 49% year-on-year as order volumes fell 22%.
Meanwhile, fees from options traded on the National Stock Exchange, the largest derivatives exchange in India, grew just 2% this year through April, sharply lower than the 92% growth in the same period last year, according to Bloomberg data.
India still remains the world’s top destination for equity options, but the situation in the country highlights the significant influence that regional policies can have on worldwide trading volumes.
