After a significant dip in March, derivatives turnover on the BSE picked up in April and has stabilised at around R20,000 crore levels.

In the last 10 sessions, derivatives turnover on the exchange has averaged R21,180 crore, which is more than double the average turnover of R7,912 crore seen in the first 10 sessions of March. According to industry observers, volumes had stabilised in April owing to participation from some international firms and proprietary traders.

?Derivative volumes in BSE have been around these levels from some time now. The Liquidity Enhancement Incentive Programme (LEIPS) has been the major driver for the volume pick up. The BSE launched LEIPS IV on May 2 and will be running it for the next six months,? said Yogesh Radke, head – quantitative research, Edelweiss Securities. ?The exchange has been taking a lot of steps to increase volumes in this segment through market making,? added another derivatives analyst.

BSE?s derivative volume had seen a substantial spike in the second week of February, with volumes touching a high of R51,480 crore on February 15. Market participants had attributed this surge in volumes to the exchange?s LEIPS.

Madhu Kannan, former managing director & CEO of BSE had said in February that he was happy with the positive response to BSE?s efforts in the derivatives segment. ?We have over 400 members registered for LEIPS and about 120 members regularly participating,? he had said. A mail sent to the BSE on Friday, though, went unanswered.

Alok Churiwala, director at Churiwala Securities and a former board member on the BSE board said that more than the improvement in the derivatives volumes on the exchange, he was gung-ho about the step-up in efficiency in trades.

?The bid and ask price difference now ensures that a customer can enter and exit a trade efficiently. Earlier, critics were pointing out that the options volumes were deep out of the money, but now more volumes are happening in the money or at the money,? he said.

Radke pointed out that although the incentive scheme will support the volumes for some more time but volume growth may not come soon.

In 2011, the BSE announced three rounds of LEIPS. While the first round of the scheme was aimed at getting members introduced to the processes, the other two tranches, introduced in October 2011 and February 2012, were proposed to maximise participation in index and stocks derivatives.