NSE?s cash market growth pips derivatives, up 79.5% from Jan

The cash market on the NSE has registered a higher growth compared to derivatives since January this year.

The average monthly derivatives trading (in terms of value) on the bourse was up 60.9% to Rs 62,595 crore in July 2009 from Rs 38,906 crore in January 2009.

On the other hand, the average cash market trading (in terms of value) on the NSE has risen sharply by 79.5% to Rs 17,164 crore from Rs 9,559 crore.

The highest rise in derivatives was in March at 38.7% and for the cash market, it was 54.7% ? in April.

In terms of volume, the figures have followed the same trend. The average derivatives trading in terms of volume on the NSE has risen from 83.47 crore in January to 95.76 crore in July.

CARE deputy managing director DR Dogra said, ?Turnover growth in the cash segment has increased over the past seven months compared the F&O segment, implying delivery-based buying. The reasons can be attributed to optimism in the country?s economy, attracting long-term investors in the market. Also, long-only large hedge funds are now interested in India from a long term perspective.

With improvement in the economy and credit availability, out per-formance in mid-cap has been observed.?

Investors are taking more interest in Nifty options. The average monthly value has increased steadily from Rs 15,463 crore in January to Rs 28,759 crore in July.

The share of Nifty options in the total NSE derivatives has also increased from 39.74% to 45.94%.

A derivatives analyst from a broking firm 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, onecan make money in a range-bound market.?

?Investors buy put or sell call options to hedge their portfolio in uncertain times, so the open interest has gone up,? he added.

On the other hand, the average monthly value of NSE future was up 53.7% to Rs 16,588 crore from Rs 10,791 crore during the study period. But the share of NSE futures in the total NSE derivative decreased from 27.74% in January to 26.50% in July.

But in terms of volume, the NSE futures and options market showed an upward trend during the study period. The average monthly volume of NSE futures market increased 12.4% to 76.68 crore from 68.22 crore. Similarly, the average monthly volume of NSE option market has risen 49.9% to 8.83 crore from 5.89 crore.

In options market, index option were popular. The average monthly volume of index options increased from 5.30 crore in January to 6.63 crore in July.

On the other hand, the average monthly volume of index future showed a decline against an increase in stock futures during the study period.