The derivatives market in NSE has seen an upward trend during 2008-09 when the cash market saw a decline. The average monthly derivatives trading in terms of value on the NSE has increased by 35.7% to Rs 51,996 crore in March 2009 from the level of Rs 38,321 crore in April 2008. On the other hand, the average cash market trading in terms of value on the NSE has decreased by 25.2% to Rs 10,140 crore from the level of Rs 13,561 crore. However, there was the highest increase of 38.7% and 28.5% in derivatives and cash markets respectively during the month of March.
On the other hand, in terms of volume, the figures have followed the same trend. The average derivatives trading in terms of volume on NSE has increased from 73.55 crore in April 2008 to 99.93 crore in March 2009.
An analyst from the derivatives market said, ?The market has been lacklustre and more and more people are resorting to speculation rather than trading in cash as we need only margin amount for trading in derivatives.?
Among the products, investors are taking more interest in NSE options. The average monthly value of NSE options has increased steadily from Rs 7,471 crore on April 2008 to Rs 23,694 crore on March 2009.The share of NSE option in the total NSE derivatives has also increased from 19.49% to 45.57% .
Siddarth Bhamre, derivatives analyst, Angel Broking, said, ?Investors lost lots of money in futures trading. So, they started trading in options, where the risk is limited. Secondly, the market was in range and using options, one can make money in a range-bound market.?
?Investors buy put or sell call options to hedge their portfolio in uncertain time, so the open interest gone up,? he added.
On the other hand, the average monthly value of NSE future decreased by 8.3% to Rs 28,302 crore from Rs 30,850 crore during the study period. And the share of NSE future in the total NSE derivative also decreased from 80.50% in April2008 to 54.43% in March 2009. But in terms of volume, the future and option market showed an upward trend during the study period.
The average monthly volume of futures market increased by 23.2% to 84.03 crore from the level of 68.21 crore. Similarly the average monthly volume of options market increased by 197.7% to 15.90 crore from 5.34 crore. In options market, the index option is very popular.
The average monthly value of index options increased from Rs 6,678 crore in April 2008 to Rs 22,204 crore in March 2009.