NSE stock futures take plunge in Jan

Written by Pradip Kumar Dey | Mumbai | Updated: Mar 10 2009, 06:03am hrs
Due to the dull sentiment, trading in derivatives products, mainly stock futures in NSE, have lost ground since January 2009. From a value of around Rs 7.78 lakh crore in January 2009, the total value of derivatives trading on the NSE has decreased to Rs 7.12 lakh crore during February. Till March 9, the value of NSE-based derivatives was placed at Rs 2.50 lakh crore. Amid this, the share of NSE-based stock futures in terms of volume has decreased from 81.73% in January 2009 to 79.94% in February 2009 and further decreased to 74.60% in March (up to March 9) 2009.

In the derivative market, the interest in NSE-based stock futures has been decreasing faster than expected. DR Dogra, DMD, CARE said, "The fall is primarily attributable to the decline in the benchmark indices and lower retail and institutional investor participation. With the volatility in prices also being low, traders were wary of participating in intraday trade."

Of the total derivatives, the value of NSE-based stock futures has decreased to Rs 1.85 lakh crore in February 2009, down from Rs 2.15 lakh crore in January 2009. And in March (up to March 9), the value of NSE-based stock futures was Rs 0.62 lakh crore.

In terms of volume also the figures followed more or less the same trend. The total volume of NSE-based derivatives decreased from 1669.46 crore during January 2009 to 1415.35 crore during February 2009. And in March (up to March 9), the total volume of NSE derivative was 404.67 crore.

In terms of value, the share of the NSE-based stock futures has decreased marginally from 47.88% during January 2009 to 47.43% during February 2009 and decreased further to 47.33% during March 2009.

The share of stock option in total NSE derivatives in terms of value, decreased from 2.42% during January 2009 to 2.24% during February 2009 and increased to 2.94% during March 2009. But in terms of volume, the share of NSE stock options increased from 7.05% during January 2009 to 7.34% during February 2009 and increased further to 8.69% during March 2009.

Index futures were the first derivatives product to start trading on the bourses. But there has been a notable improvement in trading interest, when index options were introduced. But recently index futures were showing a downward trend. For instance, the traded volume of Nifty futures decreased from 81.19 crore during January 2009 to 72.51 crore during February 2009 and further to 25.91 crore during March 2009. The share of Nifty Futures (in terms of volume) in total derivatives steadily increased from 4.86% during January 2009 to 5.12% during February 2009 and further to 6.40% during March 2009.