Algorithms helped foreign funds and proprietary trading desks pocket 588.4 billion rupees ($7 billion) in gross profits from trading Indian equity derivatives, a study by the nation’s market regulator showed.
The bulk of the gains came at the expense of individual traders and others, who lost a combined 610 billion rupees dabbling in futures and options in the financial year ended March, according to the study published Monday.
The size of profits raked in by high-frequency trading firms shows how individual traders face long odds when competing against larger and better-funded players. India’s $4.6 trillion derivatives market grabbed global attention in April after US-based Jane Street Group revealed that a strategy used in the country generated $1 billion in profits.
Nine out of every 10 retail traders in the derivatives market lost money during the three-year period ended March, with only 1% making profits of over 100,000 rupees. More than 75% of the 10 million individual traders in India declared annual income of less than 500,000 rupees, the study showed.
