BSE derivatives segment turnover jumps to Rs 69,000 crore

The bid-ask spread is improving. Open interest for these two contracts are also going up steadily while liquidity has been good.

The recently relaunched S&P BSE Sensex derivatives contracts seems to have piqued interest for traders as the turnover hit a high of Rs 69,422 crore – Rs 69,287 crore in options and Rs 135 crore in futures – on its third weekly expiry last week. This was four times the turnover of the previous expiry.

Options turnover grew 300 percent, while Futures turnover jumped 373 percent over the previous expiry.

The BSE said that a total 11.09 lakh contracts were traded on Friday through 2.54 lakh trades. Prior to expiry, the total open interest reached a peak of 1,05,200 contracts with a value of Rs 6,580 crore.

In order to boost volumes, BSE last month reduced the lot size of Sensex contracts from 15 to 10 and the Bankex contracts from 20 to 15. Contracts of these indices now expire on Fridays, instead of Thursdays earlier.

This reduction allows smaller investors to participate in these contracts with lower capital requirements, making them more accessible to a wider range of market participants.

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For National Stock Exchange (NSE) of India, which is virtually a monopoly in the derivatives market, most of the derivative volume is in weekly options and that too on expiry days. Nifty and Bank Nifty contracts expire on Thursday, while FinNifty contracts expire on Tuesdays. The BSE, by shifting the expiry day to Friday, hopes to capitalise on higher trading volumes on the expiry day.

The strategy seems to be working, at least in the initial days. The bid-ask spread is improving. Open interest for these two contracts are also going up steadily while liquidity has been good. Several top brokers have started offering these contracts or have assured they will start offering it very soon, said a source at the BSE.

Also read: BSE takes fresh stab at reviving F&O segment with weekly options

Not many brokers used to offer these products to clients as there was hardly any demand for the same. The BSE had said it was working with brokers to make it available for their clients. Sources at BSE said Zerodha, ICICI Securities, IIFL Securities, Motilal Oswal and Anand Rathi have already started offering the products. Kotak Securities, 5paisa, Upstox, and Groww will soon be joining, the person added.

BSE said more than 155 members are participating in this segment now.