Fears of high derivatives to cash turnover misplaced in Indian market

The data for India also includes single stock futures, unlike the case with other markets. If the same is excluded, the ratio for India would be even lower

The Securities and Exchange Board of India (Sebi) last year expressed concern over the high equity derivatives turnover vis-à-vis cash segment in the Indian market. However, a recent report by Asifma, an independent, regional trade association with over 100 member firms, observes that these fears may be misplaced. “Inconsistent reporting methodology by the NSE/BSE versus other exchanges in the region inflates derivatives trading volumes and paints a misleading picture that Indian markets are excessively dominated by derivatives trading,” said Asifma. 

Other markets calculate the premium values on options trades, while the NSE and BSE do it based on