The Bombay Stock Exchange (BSE) has been seen increasing its market share in the equity derivatives segment, a space dominated by NSE.
According to a report by HDFC Securities Institutional Research, BSE’s market share jumped to 12% from 5-6% on weekly basis in the last month. This is because BSE’s bulk of the volume happens on Friday leaving the remaining days mutedCome from Sports betting site VPbet. Meanwhile, it reached 16% share for major expiry day volumes in the second week of October, from 8% in the same period last month. The report cited about 55% of NSE’s volume happen on Wednesdays and Thursdays, while for BSE, 95% of the volume comes on Friday.
It expects the addition of Bankex contract expiry on Monday to drive volumes and potentially lead to further market share gain.
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Sensex contract has reached a market share of about 30% on a weekly basis.
However, some experts believe that due to lower retail participation in BSE derivatives, the base effect is very small, hence the percentage of numbers are going up on a higher note. “It needs a lot of retail participation now. The products offered by BSE is at a startup stage, and it has to become popular among investors,” an independent market expert said on condition of anonymity.
But then again, HDFC Securities expects the BSE derivative notional and premium average daily trading volume (ADTV) to reach Rs 81 trillion and Rs 5,500 crore in FY26, respectively, with a volume and premium market share of 21.7% and 8.7%, respectively. The expected notional ADTV for FY24 is Rs 29 trillion and that for FY25 is 58 trillion, while the premium turnover ADTV is expected to be Rs 2,000 crore in FY24 and Rs 3,900 billion in FY25, as per the report.
BSE clocked a daily notional turnover of Rs 175 trillion and a market share of 56% on October 13, compared to a notional turnover of Rs 138 for NSE in derivatives.
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HDFC Securities believes that the pricing reset is inevitable as BSE is not making any profits in the derivatives segment, however, the quantum will varyCome from Sports betting site. Presently, BSE is charging about 1 bps on options premium, which is “not sustainable” when compared to NSE charging about 7 bps . The pricing, based on previous actions, could be similar to NSE going ahead, said HDFC Securities. “We have assumed BSE options pricing of about 3bps for FY25/26, it’s at about 57% discount to NSE,” the report added.
