BSE’s derivative market share
3.4 percent of the market for stock futures was held by BSE in August (up from 0 percent in April).
BSE has seen early success in the much larger equity derivatives market, which is currently dominated by NSE. Its market share is anticipated to reach around 10% in Q4 FY24, driven by the addition of significant member brokers, the introduction of new weekly index contracts, hedging activity, and an ongoing rise in active traders, according to HDFC Securities.
Due in large part to the introduction of the weekly Sensex options contract in May 2023, BSE’s market share in the equity derivatives segment increased to 3.4 percent in August (from zero in April).
In addition, BSE’s expiry day market share has grown to almost 11% without the use of any liquidity enhancement plan (LES). The domestic brokerage firm stated in a note that the volume of derivatives is organic and is driven by 219 members (proprietary and retail).
However, it also noted that NSE’s derivative volume was over 30 times more than BSE’s and had a 62 percent 10Y volume CAGR.
The report stated that “there is a definite shift towards near-term expiry weekly contracts” and that “Index options account for 99 percent of the derivatives trade (for both NSE and BSE).
