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The National Stock Exchange (NSE) has ceded its title as the world’s largest derivatives exchange by number of contracts to Brazil’s B3 for the first seven months of 2025, Chief Executive Officer Ashishkumar Chauhan said during the exchange’s quarterly earnings call on Wednesday.
Chauhan attributed B3’s rise to its even smaller contract sizes compared to those on the NSE, noting that contract size plays a critical role in driving trading volumes.
In July, the NSE averaged about 112.7 million contracts traded per day.
The exchange appeared to be downplaying the ‘world’s largest derivatives exchange’ tag amid growing concerns over mounting losses among individual investors and outsized gains made by global trading firms in India’s domestic market.
“India remains one of the largest derivatives markets globally in terms of contracts traded, reflecting the vibrancy and accessibility of our market,” Chauhan said. “The average contract size in India is relatively small. The higher volume is largely driven by the smaller contract size of Indian options. In value terms, NSE’s options premium turnover is less than one-fifth of US options turnover for stocks.”
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In response to concerns around speculative trading, the Securities and Exchange Board of India (Sebi) recently raised the minimum contract size for index futures and options (F&O) contracts to ₹15 lakh, resulting in larger lot sizes.
Other regulatory measures, such as scrapping calendar spread benefits on expiry days and limiting weekly expiries, have also been rolled out, with five out of six proposed reforms implemented so far.
These changes come in the wake of data showing that over 90 per cent of retail traders incur losses in F&O trades.
The impact has been visible, with derivatives trading volumes falling nearly 30 per cent from their peak. There has also been some cooling in high-frequency trading, with some players adopting a wait-and-watch approach amid ongoing regulatory investigations, including the probe involving Jane Street.
The NSE management has called for clearer investor eligibility and product suitability criteria to better protect retail participants, alongside reinforced investor education efforts. “By introducing investor eligibility and suitability norms, we can help ring-fence retail investors’ losses while investor education is enhanced,” an NSE executive said.
The management also pointed to global trade uncertainties and tariffs as factors contributing to cautious sentiment in the market.
The exchange plans to launch Vix futures, expanding further into its volatility-linked product suite.
“One feedback that has come is for us to consider launching Vix futures — something that we may take up at a suitable point,” said Sriram Krishnan, chief business development officer, while outlining plans for more contracts in the commodity and power derivatives segments.
Earlier this month, the NSE launched electricity futures in the power derivatives space.
The exchange also discussed expanding its colocation rack infrastructure.
For the quarter ended June, the NSE reported a consolidated net profit of ₹2,924 crore, up 14 per cent from ₹2,567 crore a year ago. However, revenue from operations fell to ₹4,032 crore from ₹4,510 crore in the same quarter last year.
The exchange confirmed that its two settlement applications related to colocation and dark fibre remain under Sebi’s review.
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