BSE share price at an all-time high: Index derivatives segment boosts

Derivatives are like a speedometer for how something is changing. Imagine you’re driving a car, and you want to know how fast you’re speeding up or slowing down. The speedometer tells you that. In the same way, a derivative tells you how something is changing at a particular moment, whether it’s how fast a car is accelerating or how a stock price is going up or down, it is a tool to help us understand and predict changes in various things.

BSE SENSEX AND BANKEX Derivatives Drives BSE Ltd Share Price

BSE’s success with the SENSEX contract in the equity derivatives segment, despite NSE’s dominance, is notable. SENSEX now captures around 40% of NSE’s derivatives volume (NIFTY). With the introduction of the BANKEX contract, BSE aims to cover derivatives volume, achieving an impressive market share last week with a single contract.

The entry of discount brokers and new product launches will further boost BSE’s market share. Organic growth in derivatives trading is driven by proprietary and retail traders, with active UCCs on the platform increasing to approximately 0.4 million from almost zero in June 2023.

The above chart shows the significant growth of equity derivatives contracts turnover which is exponential since the BANKEX and SENSEX contracts are introduced to the market. We are still in the last week of October; the turnover for this expiry will likely reach a new high this expiry.

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The chart of Yearly Turnover shows the rising interest of investors and traders in the derivatives segment while the likes for BSE derivatives are increasing. As all brokers will start allowing BSE derivative trading on their platform the turnover will surge.

As We See the whole picture at a time each and every factor is working in BSE’s favour, The significant rise in turnover and the huge surge in the share price of BSE Ltd. Stock has given the following returns since the last period and the price has risen to 1708.00 since May 31, 2023, where BANKEX and SENSEX contracts launched, the share price has given around 206.26% returns.

BSE derivatives market share on expiry day now stands at 56% reported last week’s expiry. This shows the success of SENSEX and BANKEX contract derivatives. As shown in the chart the market share of the derivatives segment is continuously increasing, which is a healthy sign for the share of BSE Ltd. For its future prospectus.

Latest Update

The Stock price is driven by the sentiments of investors where this increased activity in the derivatives segment will incur a great level of revenue for BSE Ltd. In the coming time. The transaction fees of BSE Ltd are still below average market fees charged. The Bombay Stock Exchange (BSE) has announced an increase in transaction charges on the equity derivatives segment, specifically focusing on S&P BSE Sensex Options. The new fee structure will come into effect on November 1, 2023.

Please be aware that these adjustments are limited to S&P BSE Sensex Options, and there are no alterations to transaction fees in any other equity derivatives contracts. These changes will give a massive jump to revenues from the derivatives segment ultimately raising in bottom line of the company.

After this development, the stock listed on the NSE surged by 13.24% to reach a peak of Rs 1,798, on an intraday basis.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions