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Sensex, Bankex derivatives contracts' turnover crosses Rs 10,000 crore

This surge in trading activity was accompanied by an Open Interest (OI) value exceeding Rs 1,350 crore

May 26, 2023 / 05:08 PM IST
BSE (File pic)

BSE (File pic)

India’s premier bourse BSE has logged a turnover of Rs 10,000 crore in the derivatives contracts for Sensex and Bankex which were launched on May 15.

This surge in trading activity was accompanied by an open interest (OI) value exceeding Rs 1,350 crores, BSE tweeted on May 26.

To enhance market participation and liquidity, the BSE reduced the lot size for futures and options contracts. The lot size for Sensex derivatives has been reduced from 15 to 10, while for Bankex derivatives, it has been reduced from 20 to 15.

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.

The derivative contracts offered by the BSE are based on the Sensex-30 index, which comprises 30 of the largest and most liquid stocks listed on the exchange. These contracts, including options and futures, provide investors with a way to hedge against market volatility and speculate on price movements of the underlying stocks.

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

The derivatives market plays a crucial role in price discovery and risk management, enabling participants to manage their portfolios more effectively.

Another significant change introduced by the BSE is the modification of the expiry cycle for options contracts. Previously, the options contracts expired on Thursdays. However, the BSE has now adopted a new expiry cycle, with options contracts expiring on Fridays. This change aligns the expiry cycle of BSE's options products with the trading calendars of major global exchanges.

It also differentiates BSE from its rival exchange, the National Stock Exchange (NSE), which continues to have a Thursday expiry cycle for its Nifty and Bank Nifty weekly option contracts.

Moneycontrol News
first published: May 26, 2023 04:42 pm