F&O turnover declines 21% as market sees impact of Jane Street ban

F&O turnover on the National Stock Exchange drops 21% on the first expiry of Nifty weekly contracts since Jane Street's ban, with index options turnover seeing a significant decline

On the first expiry of Nifty weekly contracts since the ban on US-based high-frequency trader Jane Street, the total turnover on the National Stock Exchange (NSE) dropped 21 per cent compared to the previous expiry day.

 

Index options turnover on a notional basis slipped to ₹472.5 trillion on Thursday, down from ₹601 trillion on July 3 – the day before Jane Street was barred by the market regulator, the Securities and Exchange Board of India (Sebi).

 

In terms of the number of index options contracts traded at 247 million on Thursday were the lowest in three months. 

  However, the stock futures and options saw only a marginal decline of 2 per cent compared to Thursday. 

 

Several market participants had raised concerns that the restriction on proprietary trading firms' activities could dent volumes. They said a clearer picture would emerge in a few weeks.

 

HFTs (high-frequency traders) can account for as much as 60 per cent of the derivatives turnover, with a strong hold in options.

 

Another market player highlighted that the markets may see healthier trends in the long run by reinstating confidence among smaller investors and reducing dependence on a single entity.

 

From a peak of around ₹537 trillion in September, the average daily F&O turnover in the equities segment fell 35 per cent to around ₹346 trillion in June, driven by Sebi’s tightened regulations to curb manipulation and excessive speculation.