BSE to launch commodity derivatives trading from 1 October

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Published: May 7, 2018 4:33:15 PM

Leading stock exchange BSE will launch trading in the commodity derivatives segment from October, and will focus on non-agri products to start with, a senior official said.

“We will start with non-agriculture commodities like metals, energy and base metals,” Ashish Chauhan, MD and CEO, BSE (Image: BSE)

Leading stock exchange BSE will launch trading in the commodity derivatives segment from October, and will focus on non-agri products to start with, a senior official said. Markets watchdog Securities and Exchange Board of India (Sebi) on 28 December last year had announced that from coming October, the country would have a unified exchange regime wherein stock exchanges would be allowed to offer trading in commodities derivatives.

“The BSE will begin commodity exchange from October 1,” its managing director and chief executive Ashish Chauhan today said, adding, “We will start with non-agriculture commodities like metals, energy and base metals. We have applied (to Sebi) for non-agri commodities.” Talking to reporters at the launch event of Kotak Securities’ ‘Free Intraday Trading’, an offering for self-directed investors for intra-day trades across cash, futures, and options segments, Chauhan said intra-day traders have played a crucial role in increasing trade volume.

“The first framework was automation, which took volumes by 20-100 times. Then came algorithm trading, then came derivatives – equities, commodities, currencies. Put together, internationally, volumes have increased somewhere between 5,000 and 20,000 times in the last 25 years, with most of them coming from intra-day traders,” he said.

Chauhan added that “robo advisory” will take off with softwares automatically deciding things, placing orders, etc. “It might take off as smaller brokers are not making good money from trading businesses, so they are trying to shift into other areas with more margins like mutual funds, brokering for properties, insurance,” he said.

Kotak Securities’ FIT, available at an annual subscription fee of Rs 999, is expected to double its customer base in 18 months, according to its managing director and chief executive officer Kamlesh Rao. It will also offer BSE StAR MF platform for retail investors to directly invest in mutual fund schemes.

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