Would trading equities give me more returns than trading futures?

<p>Both equity and futures trading offer opportunities for returns, but they come with different levels of risk and complexity. Carefully assess your individual circumstances and objectives before making a decision on which investment approach is right for you.&nbsp;<br></p>

<p id="isPasted">Trading futures generally offers the potential for significantly higher short-term returns due to leverage, while equities are better for consistent, long-term wealth through compounding and dividends.&nbsp;</p><p>In 2026, the choice between them involves weighing the "power of leverage" against "ownership stability".&nbsp;</p><p><strong>Key Performance Comparison (2026)</strong></p><p><strong>&nbsp; &nbsp; &nbsp; Feature&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Equities (Cash Market)&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Futures (Derivatives)</strong></p><table data-animation-nesting="" data-sae="" style="border: none; border-collapse: collapse; table-layout: auto; width: 652px; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(16, 18, 24); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;" id="isPasted"><tbody><tr data-complete="true" data-sfc-cp=""></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">Potential Returns</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">Moderate/Stable: Driven by company growth &amp; dividends.</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 0px;">High/Volatile: Magnified by 5x–20x leverage.</td></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">Risk Profile</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">Lower: Losses limited to your investment amount.</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 0px;">Very High: Can lose more than initial capital.</td></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">Typical 2025 Returns</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">Sensex (+9.3%) &amp; Nifty (+10.6%).</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 0px;">Highly variable based on timing and leverage used.</td></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: none; min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">2026 Outlook</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: none; min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 16px 12px 0px;">Forecasted +10.3% (Private Equity).</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: none; min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 14px; font-weight: 400; line-height: 22px; letter-spacing: 0px; padding: 12px 0px;">Success depends on accurately timing price swings.</td></tr></tbody></table><p><br></p><p id="isPasted"><strong>Why Futures Can Provide "More" Returns</strong></p><ul><li>Leverage: You can control a large position with small capital. For example, a contract worth ₹17 lakh might only require a ₹2 lakh margin. A small 5% price move can result in a 25% return on your actual capital.</li><li>Short Selling: Futures allow you to profit easily from market crashes by selling first and buying later, which is harder in the cash equity market.</li><li>Lower Taxes (U.S. Only): In the U.S., futures gains are taxed more favourably (60% long-term / 40% short-term) regardless of the holding period. </li></ul><p><strong>Why Equities Are Often "Better" for Most</strong></p><ul><li>No Expiry: You can hold stocks for years or decades, benefiting from multi-year compounding. Futures contracts expire every month, forcing you to close or "roll over" your position.</li><li>Passive Income: Stocks pay dividends; futures do not.</li><li>Less Pressure: If a stock price drops, you can wait for it to recover. In futures, a sharp drop can trigger a margin call, forcing you to add more cash immediately or face automatic liquidation of your trade.</li><li>Budget 2026 Impacts (India): Recent tax hikes in India increased the Securities Transaction Tax (STT) on futures from 0.02% to 0.05%, raising the cost for frequent traders. </li></ul>