Chapter 14

The exits

Published 30 September 2026

Every casino story ends with the same question: did anyone actually leave? The regulator tightened the machine in late 2024 - fewer expiries, bigger contracts, upfront premiums, a higher tax on every trade. Two years on, the exits data is in. This is the chapter of who left, who stayed, and what the house did next.

The first measurable exit was from the order flow. Angel One's Q4 FY25 - the first full quarter under the new rules - showed total orders down 22.4% in a single quarter, to about 327 million. The biggest broker felt it too: Zerodha's founder disclosed a hit of about 40% in brokerage revenues in the June 2025 quarter against the year before. For the first time since the boom began, the machine's velocity fell. The tightening had done in one year what a decade of warnings had not: it made playing measurably harder, and some of the crowd stopped playing.

The crowd that stayed

But a fall in orders is not an exodus of people, and the regulator's own persistence finding explains why. More than 75% of loss-makers kept trading F&O even after two consecutive losing years. The product's hold does not weaken with evidence - the evidence is the product's advertisement. "Slowed by regulation" describes the machine's turnover, not its customer base: the 42 lakh new traders who arrived in FY24, the 43% under thirty, the 72% from small towns - there is no study yet showing those people left. They are trading a somewhat slower machine at a somewhat higher price, against the same algorithms, at the same 91%.

The door the regulator would not close

While the industry waited for the next shoe, the market filled with rumours of a full weekly-expiry ban - the one move that would actually retire the machine. The regulator killed that rumour itself, twice. In August 2025, SEBI Chairman Tuhin Kanta Pandey publicly rejected reports of ending weekly expiries as speculative, promising full consultation before any further reform. In October 2025 he was plainer: the regulator "cannot just shut down" weekly expiries. By March 2026, the position was wait-and-see: the regulator would watch the impact of the rules already in force and act further only "if necessary".

Read those three statements together and the state's final position comes into focus. The casino will be taxed, frictionalized, disclosed and warned against. It will not be closed. The weekly expiry - the single mechanism that turned a leveraged hedging instrument into a daily lottery for a crore of people - survives, defended at the podium by the referee himself. The study that proved 93% lose was published by the same institution that then guaranteed the game would go on. Whatever the study was for, it was not for ending this.

The exit that is actually an exclusion

One measure in the tightening genuinely reduced participation, and it is worth naming honestly: tripling the minimum contract size. When a single lot requires ₹15 lakh of underlying instead of ₹5 lakh, the smallest accounts cannot post the margin, and they stop trading - not because they learned the odds, but because the ticket price rose past their reach. The reform's most effective protection is a velvet rope. The trader with ₹20,000 is not educated out of the casino; he is priced out of it, free to watch through the window until a cheaper derivative of the dream is invented for him. And the industry has a history of inventing it.

The next cohort is already in the funnel

Finally, the recruitment engine never paused for the rules. The apps still onboard lakhs a month; the sponsorships still run in prime time; the influencers, chastened but unbanned, still sell the map. Every month of FY26 has delivered a fresh cohort of first-timers into a machine whose base rates have not moved since the study that measured them. The exits story, told honestly, is this: the door got heavier, the room got slightly emptier, the queue outside never dispersed. The machine does not need the same crowd forever. It needs a crowd forever - and everything in the record says it still has one.

The house builds new rooms

Watch where the industry's capital went while the options floor was being slowed. Zerodha's margin-funding book hit ₹5,000 crore in nine months; Angel One's client funding book doubled in a year; Groww tripled its profit and went to the public markets with a prospectus built on the same active-trader engine. Every dealer reached the same conclusion from the tightening: if the casino's fastest table is being slowed, lend the players money and open more tables. The business of retail speculation did not shrink under the new rules. It diversified - into credit, into new apps, into the public markets themselves, where the dealers' own shares now trade on the same exchanges their customers bleed on.

What actually changed

So the honest ledger of the tightening reads like this. Costs: higher, borne by the same crowd. Expiry frequency: halved per exchange, survived everywhere. Contract size: tripled, which locked out the smallest players - arguably the only true exit the reforms produced, and one that works by exclusion rather than protection. Broker revenues: dented for a year, already adapting toward lending. The machine: running. The crowd: thinner at the margins, dense at the core, replenished by every cohort of first salaries.

And the next study is already being lived. Somewhere in the FY26 order flow is the answer to whether friction can beat design - whether heavier doors keep a crowd out of a room where nine in ten get robbed. The early evidence, from the brokers' own calls, is that the house expects them back: margin guidance restored, funding books doubled, sponsorship budgets intact. The house has seen the crowd leave before. It has always seen them come back.