Chapter 6

The map of losses

Published 30 September 2026

If you mapped India's F&O losses the way the regulator did - city by city, state by state - the map would not look like the marketing. The marketing is glass towers in Mumbai. The map is Meerut, Rajkot, Jodhpur, Kanpur. The losses of the nation's derivatives boom live where the nation's salaries don't.

Over 72% of all individual F&O traders in FY24 came from beyond the top 30 cities - the towns, district headquarters and small cities the industry calls B30. That is a deeper small-town skew than even mutual funds, where 62% of investors are from B30. And the comparison gets sharper: for every 100 mutual fund investors, there were 28.6 F&O traders from B30 cities, against just 17.8 from the top 30. The boring, regulated, low-margin product reaches the metros. The casino reaches everywhere.

Four states, half the damage

Concentrate the map further and it condenses to four states. More than half of all F&O traders in FY24 came from Maharashtra, Gujarat, Uttar Pradesh and Rajasthan. Maharashtra alone supplied 21.7% - 18.8 lakh traders. Gujarat followed with 10.1 lakh (11.6%), then Uttar Pradesh with 9.3 lakh (10.7%) and Rajasthan with 5.4 lakh (6.2%).

Each of those numbers is a story the aggregate hides. Gujarat's outsized share is generations of trading culture - the state's relationship with the markets predates the apps by a century, and the apps simply gave it leverage and a weekly expiry. Uttar Pradesh's 9.3 lakh is the recruitment frontier: first-generation market participants, first salaries, first smartphones, arriving at a product their own regulator says will take money from nine in ten of them. Maharashtra's 18.8 lakh is both - Mumbai's trading floor culture stretched thin across an entire state's small towns. And behind each lakh of traders, per the study's loss rates, sit roughly nine lakh rupees of losses per ten people.

Why the small town loses more than money

A ₹2 lakh average loss is not the same object everywhere. In South Mumbai it is a bad quarter. In a B30 town - where the study tells us three out of four traders earn below ₹5 lakh a year - it is the difference between a daughter's wedding and a loan, between a scooter and a bus pass, between savings and a moneylender. The same loss, multiplied by the same 91%, lands on a completely different life depending on the pin code. And the pin codes, per the regulator, are overwhelmingly small-town.

There is a social cost layered on the financial one. In a metro, a trading loss is private. In a small town it is visible - the borrowed capital came from people who know you, the recovery agent's call is not anonymous, the shame has an address. The apps that recruited the B30 wave did not underwrite any of that. They counted conversions.

The product that beat the mutual fund to the hinterland

Pause on the comparison the regulator chose, because it is the most damning benchmark available. India's mutual fund industry spent two decades and thousands of crores trying to reach beyond the top 30 cities - investor camps, vernacular advertising, "Mutual Funds Sahi Hai", an entire distribution army of small-town agents. It got to 62% B30. The options market, with no investor camps and no suitability checks, got to over 72% in a fraction of the time. The product that requires the least paperwork won the hinterland. The product with the worst documented outcomes in Indian finance has the deepest small-town penetration of any market instrument the regulator measures.

That is not a distribution triumph. It is a selection effect. The mutual fund asks for a bank account, a KYC, a horizon of years, and offers a boring 12%. The trading app asks for a phone and a fingerprint, and offers the possibility - the statistically false possibility, per the same study - of turning ₹5,000 into ₹50,000 by Thursday. To a 24-year-old in a B30 town earning ₹3 lakh a year, the boring product is not a competitor to the exciting one. It is an admission that Thursday will look like today. The casino won the hinterland because the hinterland had the most to escape, and escape is what the casino sells.

The gender line

Inside the map runs one more boundary, and it moves the opposite way from the industry's PR. The share of female traders in F&O fell from 14.9% in FY22 to 13.7% in FY24 - and the women who stayed lost less often than the men: 86.3% of female traders lost in FY24, against 91.9% of male traders. Both numbers still describe a slaughter. But the direction is revealing: the cohort with the marginally better outcome is quietly exiting, while the cohort with the worse one keeps arriving. The product is not just getting younger, poorer and more small-town. It is getting more male - concentrated, year by year, in exactly the demographic the advertising targets during the cricket.

What the map explains

The geography is the business plan made visible. Metros were saturated early - every salaried professional in Bengaluru who would ever try F&O tried it years ago, and the study's persistence numbers say most stayed to lose. Growth had to come from somewhere, and somewhere turned out to be the 72%: towns where a trading app is a status symbol, where the local finfluencer speaks the language, where ₹46,000 - the average first-year loss of the FY24 newcomer cohort - is half a year's savings rather than a month's. The map of losses is a map of aspiration, priced. The house did not just find India's small towns. It found what the small towns were saving, and gave it a weekly expiry.