At ₹506 trillion, derivatives turnover hit 12-month high in October

BSE's futures and options ADTV rose 33% month-on-month against NSE's 5.6%

The average daily turnover (ADTV) in the derivatives market rose to a 12-month high in October, touching ₹506 trillion — up nearly 46 per cent since June — as volatility picked up and concerns over further regulatory tightening eased.

 

Derivatives activity had slumped earlier this year after the Securities and Exchange Board of India (Sebi) capped weekly expiries to two days and discontinued weekly contracts on non-benchmark indices.

 

The latest rebound brings turnover within 5.7 per cent of its record level of ₹537 trillion, registered in September 2024.

 

“When the regulatory changes began to take effect, derivatives volumes did dip. The biggest fear was that weekly expiries would be scrapped altogether. But recently there’s been clarity from the regulator that such a move is unlikely,” said Suresh Shukla, chief business officer at SBI Securities. 

Derivatives are largely used by traders who are less concerned about the market’s medium-term direction.

 

According to Sumeet Bagadia, executive director at Choice Broking, the pickup in turnover reflects rising participation in index and stock options, aided by easier digital access and sustained interest in weekly contracts.

 

“Slightly higher market volatility during the month also encouraged short-term trading and hedging in futures and options,” he said. The cash segment, however, remained subdued. 

 

Its ADTV was almost unchanged month-on-month (M-o-M) at ₹1.06 trillion — still about 35 per cent below the June 2024 peak of ₹1.65 trillion.

 

“Cash market volumes depend on how equities have performed recently. The Nifty and Sensex were largely range-bound till September,” said Shukla.

 

“Volumes rise when there’s a sustained uptrend. One good month isn’t enough. Even though some mid- and small-cap stocks have gained over 50 per cent in a year, many retail investors are still sitting on losses and are reluctant to sell. Unless the market sees three to four months of steady gains, cash volumes are unlikely to revive,” he added.

 

Meanwhile, the battle for derivatives market share between the two exchanges continues, with BSE outpacing National Stock Exchange (NSE) in growth.

 

BSE’s futures and options (F&O) ADTV rose 33 per cent M-o-M in October to ₹221 trillion, compared to NSE’s 5.6 per cent rise to ₹285 trillion.

 

Both the exchanges had recently swapped expiry days for their weekly contracts — NSE’s Nifty now expires on Tuesdays instead of Thursdays. BSE’s Sensex contracts have moved from Tuesdays to Thursdays.