The National Stock Exchange (NSE) has continued to remain the largest exchange in stock index options trade across the globe, ahead of Chicago Boards Options Exchange.
The National Stock Exchange (NSE) has continued to remain the largest exchange in stock index options trade across the globe, ahead of Chicago Boards Options Exchange. In the Asia Pacific region, Korea Exchange has taken the second slot in index options trade.
The total number of index options contracts traded during 2014-15 stood at around 138 crore, NSE sources told dna.
In the individual stock options category, NSE has topped the Asia Pacific region with 9.1 crore contracts. In other segments as well -- such as individual stock futures and stock index futures, NSE is among the top players in the world.
Stock brokers said Nifty options are extremely popular among the options products traded in India. Nifty-50 is among the best traded options among a whole range of options available.
"With Nifty hovering around 8400, Nifty-50 contract is prized at around Rs 4.2 lakh (Nifty multiplied by 50). It is no longer a less-expensive contract. But NSE has drawn a lot of interest from investors," said market sources.
"NSE is No.1 in the derivative market, and there is definitely an increase in trading volumes across segments. Apart from Nifty-50, the recently-revamped CNX IT Index and Bank Nifty are among the most popular derivative products at NSE," says Mukesh Agarwal, CEO, India Index Services and Products Ltd (IISL), an NSE arm. IISL is India's first specialised company focused on the index as a core product.
Options are a popular trading instrument globally. Volume in option trading is linked to volatility. More volatility often invites better participation in option trades. Apart from Chicago Board and Korea Exchange, other leading international bourses having sizeable trades in stock index options include CME Group, a diverse derivatives marketplace in the US, and Eurex, a German derivatives exchange.
On Tuesday, the NSE Nifty slipped below the 8,400-level, marking its fifth-straight session of fall as domestic factors continued to drive market into further consolidation on concerns of tax woes and less-impressive Q4 results. It fell 70.35 points (0.83%) to close at 8,377.75.
NSE sources said on Monday (April 20), a little over 1.13 crore index options contracts changed hands, making it the highest so far in the current financial year. During the last financial year, December witnessed the highest number of trading. In value terms, total notional index trading stood at Rs 3,99,22,663 crore, according to NSE sources.
Though NSE has several options products, some of them – like Nifty Midcap 50 and CNX Midcap -- are not very liquid.
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