BSE derivative turnover doubles in May at Rs 6.26 lakh cr

Equity derivative turnover on leading stock exchange BSE nearly doubled to Rs 6.26 lakh crore in May marking the strongest recovery for the first time in three months, latest data by Sebi showed.

"Monthly turnover in equity derivative segment of BSE increased by 99.5% from Rs 3,13,950 crore in April 2013 to Rs 6,26,216 crore in May 2013," Securities and Exchange Board of India (Sebi) said in its latest monthly bulletin.

After recording a high of Rs 9.23 lakh crore in January, the derivative turnover at BSE sharply plunged to about Rs 2.3 lakh crore in February. Since then, the figures have been slowly improving.

The volumes of equity derivative contracts traded on BSE's platform increased to 2 crore in May from 1.10 crore in the preceding month.

In comparison, National Stock Exchange (NSE), generally a preferred bourse for derivative trading, recorded a Rs 35 lakh crore monthly turnover in equity derivative market in May -- a rise of 16.4% compared to the preceding month.

Over 11 crore contracts were traded on the NSE's platform in May as against 10.4 crore trades in the preceding month.

During May, equity derivatives turnover at NSE comprised 84.6%, while BSE represented 15.1% of the total value in the segment.

BSE witnessed a significant rise in its call and put options on stocks in May. The call and put options on index also increased by over 30%.

"The monthly turnover of put options on stock increased manifold from Rs 83 crore in April 2013 to Rs 214 crore in May 2013," Sebi said.

"The monthly turnover of call options on stock also increased manifold from Rs 55 crore in April 2013 to Rs 232 crore in May 2013," it added.

Generally, put and call option contracts provide the holders the right to sell or buy securities, respectively, at a specific price and a specified time. However, the holder is not obliged to execute the contract.