The turnover on markets has been rising steadily, doubling in the past weeks. On Thursday, the combined turnover of cash and derivatives on both exchanges touched a near three-month high of Rs 1,66,743 crore. The derivative-to-cash component ratio is increasing as well. One of the main reasons for the increase in derivative turnover is higher market volatility. The derivative-to-cash turnover ratio is currently at 6.9 – among the highest seen during the year.
“In the last 3 weeks, intra-day volatility has been high, which has seen increased participation from intra-day traders,” said Siddarth Bhamre, head of equity derivatives, Angel Broking. From early January to mid-March, the market rallied sharply. But many participants stayed away, expecting a correction. From mid-March, there has been some correction, which has increased participation levels.
According to Savio Shetty, derivatives analyst at the institutional desk of Prabhudas Lilladher, Nifty futures turnover has more or less remained the same but the stock, futures & Nifty options have seen a rise in turnover. He adds that speculation in mid-cap stocks is also behind the rise. The market share of stocks derivatives to derivative turnover has been rising over the week. While it was 33.7% on April 21, it fell to 22.4% on Wednesday.
