Cash, commodity volumes drop; futures and options continues to grow

The average daily turnover value (ADTV) fell in the equity cash and commodity derivatives segment, while it continued to rise in the equity futures and options (F&O) segment in August. The combined ADTV for the cash segment stood at Rs 68,100 crore in August, against Rs 68,200 crore in the previous month. Commodity derivatives volumes fell 6 per cent month-on-month to Rs 27,400 crore. 

Meanwhile, the F&O ADTV hit a new record of Rs 60.43 trillion (on a notional basis), compared to Rs 56.9 trillion in July. In the F&O space, options trading accounted for the bulk of volumes at Rs 59.4 trillion. ICICI Securities in a note said that the decline in volumes was due to the impact of the phase-III of upfront margin norms (75 per cent). 

The peak margin norms have been implemented in phases since December 2020. Between December 2020 and February 2021, traders were supposed to maintain at least 25 per cent of the peak margin. This was raised to 50 per cent between March and May. 

Subsequently to 75 per until August. And, finally to 100 per cent from September 1. Industry players expect F&O volumes, particularly options, to increase further as the 100 per cent margin norms have come into play.