Market Turnover Analysis: Concentration of Trading Activity Among a Few Players

Published 21-01-2025, 10:26 am

The trading activity in India’s equity cash and derivatives markets in November 2024 revealed a stark concentration of turnover among a small subset of participants. Investors trading in higher turnover ranges, particularly above INR 1 crore, continued to dominate the cash market. These investors accounted for an impressive 77.4% of the total turnover, despite a slight dip from 78% in October. Their combined turnover fell to INR 14.8 lakh crore, down from INR 18.4 lakh crore the previous month, while the number of investors in this range decreased to 0.2 lakh.

Investors in the INR 1 crore to INR 10 crore turnover range also saw a marginal decline in participation, with numbers dropping to 1.8 lakh from 2.2 lakh in October. This group, while forming just 1.4% of total investors, plays a significant role in overall market activity.

Conversely, lower turnover ranges dominated the investor count. Investors trading between INR 10,000 and INR 1 lakh represented 36.6% of the total base but contributed a mere 0.48% to turnover, totaling INR 9,243 crore. Those trading below INR 10,000 formed 35.4% of investors but accounted for just 0.04% of the turnover.

A significant observation in the cash segment is the dominance of proprietary traders in high-value categories (INR 10 crore+), contributing 36.8% to the turnover. Individual investors in this segment had a much smaller share, contributing only 14.1%.

The equity options market mirrored similar trends, with 4% of investors driving over 87% of the turnover in November 2024. Proprietary traders led the charge, contributing 49.2% of the total turnover in this segment. Individual investors, while significant in numbers, had a smaller share, accounting for 34.8% of the turnover.

Interestingly, the Gini coefficient—a measure of inequality—stood at 0.98 for the cash segment, underscoring the heavy concentration of turnover among a select group of market participants.

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Read More: Deep Industries Acquires Indra Offshore: Is the Stock Undervalued?

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