Archive · 13 Nov 2025
Derivatives Turnover Hits 12-Month High on Increased Volatility
Imagine a big game where people bet on how much the stock market will move.
In October, more people were playing this 'derivatives' game than they have in a whole year, with bets totaling a huge amount of money, Rs 506 trillion!
This happened because the market was a bit wobbly, making people want to make quick bets, and the rule-makers signaled they wouldn't stop the short-term betting too much.
People also found it easier to access these bets using their phones.
Meanwhile, people buying and selling actual company stocks (the 'cash market') were much less active, like a quiet part of the game.
This is because the stock market hadn't been going up steadily, and many people who had lost money were waiting for better times before selling.
Two main game organizers, BSE and NSE, are competing to have the most players, with BSE growing faster lately, and they've even changed when certain bets expire to attract more players.
Derivatives turnover reached a 12-month high of Rs 506 trillion in October, a nearly 46% increase since June.
The surge in derivatives activity is attributed to increased market volatility and clearer regulatory signals regarding weekly expiries.
Despite derivatives activity booming, the cash segment remained subdued with average daily turnover nearly unchanged month-on-month.
BSE demonstrated faster growth in futures and options turnover compared to NSE, though NSE still holds a larger overall market share.
Both BSE and NSE have adjusted their weekly contract expiry days as part of their competition for market share.
- Who
- Derivatives market participants and stock exchanges (BSE and NSE)
- What
- Derivatives turnover reached a 12-month high of Rs 506 trillion in October, driven by increased volatility and regulatory clarity, while the cash market remained subdued.
- When
- October
- Where
- Indian stock markets
- Why
- Increased market volatility, perceived regulatory easing on weekly expiries, sustained interest in weekly contracts, and competition between stock exchanges.
Reasons for Derivatives Turnover Increase
Factors Affecting Cash Market Activity
Derivatives Market Drivers
Reasons for Derivatives Turnover Increase
Increased market volatility and clarity from regulators regarding weekly expiries have led to a surge in derivatives turnover. Easing fears of outright weekly contract bans and sustained interest in weekly contracts on index and stock options, coupled with easier digital access, have encouraged short-term trading and hedging.
Factors Affecting Cash Market Activity
The cash market, in contrast, remained subdued with stagnant average daily turnover. This is attributed to the market's recent range-bound performance until September, with a lack of sustained uptrends. Retail investors, many still facing losses, are hesitant to sell, anticipating steadier gains over several months for volumes to revive.
Exchange Competition and Strategy
Reasons for Derivatives Turnover Increase
BSE is outpacing NSE in the growth of futures and options average daily turnover, with BSE's ADTV rising 33% month-on-month compared to NSE's 5.6%. Both exchanges have adjusted their weekly contract expiry days to compete.
Factors Affecting Cash Market Activity
While BSE shows faster growth, NSE still holds a larger overall derivatives turnover (Rs 285 trillion vs. Rs 221 trillion in October). The repositioning of expiry days indicates an ongoing strategy by both exchanges to capture market share.
- October Derivatives ADTV
- Rs 506 trillion
- Change in Derivatives ADTV since June
- Up nearly 46%
- Record Derivatives Turnover (Sept 2024)
- Rs 537 trillion
- October Cash Segment ADTV
- Rs 1.06 trillion (almost unchanged M-o-M)
- Cash Segment ADTV vs. June Peak
- Down approx. 35%
- BSE F&O ADTV Growth (Oct M-o-M)
- 33%
- NSE F&O ADTV Growth (Oct M-o-M)
- 5.6%
- BSE F&O ADTV (Oct)
- Rs 221 trillion
- NSE F&O ADTV (Oct)
- Rs 285 trillion
