NSE F&O Segment Overtakes BSE’s Cash Market Turnover

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Mumbai, July 15: : The turnovers in derivatives products in the Futures & Options (F&O) segment of the National Stock Exchange (NSE) have clearly left turnovers in the cash-markets of The Stock Exchange, Mumbai (BSE) trailing. In the last 30 trading sessions, over the past month and more, overall turnover on the NSE’s derivatives segment has outperformed the cash-market segment of BSE at least on about 15 trading sessions.

The popularity of NSE’s derivatives segment looks more solid in comparison to the overall turnover on the cash segment of BSE. Despite a series of attempts by the exchange’s authorities to keep the derivatives market in shape by appointing market makers and giving discounts in various forms, the state of the derivatives segment on BSE has not picked up, dealers said.

BSE charges 0.003 per cent as transaction charges to its derivatives segment members, which it claims is the lowest in the country. However, it does not include other charges like clearing and settlement charges. NSE on the other hand charges 0.002 per cent to its F&O member as transaction charge.

The cash markets have been hammered in the recent past due to looming war clouds followed by poor performance of most frontline stocks. Accounting debacles like that of WorldCom have added fuel to the fire. This is when penny-stocks have showed a steady performance with investors now playing on these counters attracted by low risks and possibility of higher returns, said a dealer with a domestic brokerage.

Dealers said the trend of steady performance by stocks in the B1 and B2 categories is going to be a continuing one for at least the next couple of months, and vouch for the fact that they still have steam left in them.

With frontline stocks taking a back seat on the bourses nationwide, investors are venturing forth in the futures segment where they have the alternative of more time period for squaring up their transaction, particularly in the individual stock futures.

Said Refco Sify Securities’ chief executive officer, Vineet Bhatnagar: “Investors get more leverage in the T+3 settlement as compared to the T+5 settlement. This has resulted in a spurt in volumes in the derivatives segment, since investors get quicker deliveries from the cash segment. Investors seem to have confidence in the derivatives segment of NSE as they get direct clearance from widely spread channels nationwide.”