Stock exchanges are expanding the buffet of index derivatives even as the number of stocks permitted to trade in this space, generating an average daily turnover of ₹450 trillion, is shrinking.
This week, the National Stock Exchange (NSE) started issuing futures and options (F&O) contracts based on the Nifty Next 50 Index, bringing the total count of index derivatives to five. The exchange, which generates one of the highest F&O volumes globally, already offers trading in derivatives based on the Nifty 50, Nifty Bank, Nifty Financial Services, and Nifty Select Midcap indices. Meanwhile, BSE offers index derivatives contracts on two indices the Sensex and the Bankex.
Sources said the bourses are looking to add even more products to the derivatives space as the competition among them heats up while generating growth on an already higher base becomes a challenge.
However, their proposals are hitting a wall, with not even a single new stock getting added to the derivatives space since January 2020, while some of the existing ones are being weeded out.
At its peak, NSE offered F&O contracts on nearly 200 stocks. At present, the list is down to 182.
This story is from the April 26, 2024 edition of Business Standard.
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This story is from the April 26, 2024 edition of Business Standard.
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