BSE Futures & Options Segment Sees 1,539% Surge in Premium Turnover Despite Regulatory Curbs
India’s derivatives landscape is undergoing a notable shift. The futures and options (F&O) segment of the Bombay Stock Exchange has recorded a remarkable 1,539% growth in average daily premium turnover over the past two years, even as the industry navigated a series of restrictive regulatory measures introduced by the Securities and Exchange Board of India (Sebi).
As of last Tuesday, BSE’s average daily premium turnover stood at ₹15,325 crore, marking a 112% rise from the end of 2024. In comparison, the figure was just ₹935 crore at the end of 2023, highlighting the rapid scale‑up in derivatives activity on the exchange.
Sensex Derivatives Drive Market Share Gains
Market participants attribute this sharp rise largely to Sensex derivatives emerging as a preferred trading instrument, along with the exchange’s success in onboarding new institutional clients.
According to Mohit Mangal, Vice President of Research at Centrum, BSE’s growth in derivatives turnover during 2025 was driven more by market‑share gains and client additions rather than an expansion of overall industry volumes.
He noted that BSE benefited from the strategic positioning of its Sensex index options, which attracted flows migrating from other derivative contracts. Competitive pricing, broker incentives, and improving liquidity further expanded the active participant base.
Industry Volumes Moderate as NSE Sees Decline
In contrast, the National Stock Exchange (NSE) saw its average daily premium turnover decline 24.3% from its 2024 peak of ₹68,280 crore. Combined turnover across both exchanges fell 11.2%, reflecting moderation in overall derivatives activity.
In notional terms, the industry recorded its first decline in average daily turnover in 2025, falling 16% to ₹389.56 lakh crore, following sharp expansions of 58% in 2024 and 134.8% in 2023. While NSE’s notional turnover dropped 35.3%, BSE’s surged 51%, underscoring its growing presence in the derivatives ecosystem.
Regulatory Changes Reshape Trading Behaviour
Industry participants also pointed to Sebi’s regulatory norms requiring exchanges to maintain only one index with weekly expiry contracts. This led to the discontinuation of Nifty Bank’s weekly contracts, previously the most actively traded segment, and inadvertently boosted volumes in Sensex derivatives.
A BSE spokesperson highlighted that the exchange is a relatively new entrant in active derivatives, with Sensex contracts relaunched less than three years ago. The current growth phase, according to the exchange, represents a catch‑up cycle following long‑standing market demand.
Strong Financial Performance Supports Momentum
BSE’s operational momentum has translated into financial performance. The exchange reported Q2 revenue of ₹1,139 crore, up 40% year‑on‑year, driven by transaction‑related income—primarily from derivatives—along with listing‑related revenues supported by record fundraising activity. Co‑location services also continued to scale rapidly.
Meanwhile, cash‑market activity softened across exchanges. NSE’s average daily cash turnover declined 14.6% to ₹99,502 crore, while BSE’s fell 20.3% to ₹7,056 crore, reflecting broader market caution.
A Structural Shift in the Derivatives Landscape
Despite regulatory tightening and moderation in overall volumes, BSE’s rapid growth underscores a structural shift in India’s derivatives market. With Sensex options gaining traction and institutional participation expanding, the exchange has carved out a meaningful position in a segment historically dominated by NSE.
As the market adapts to tighter norms and evolving trading preferences, BSE’s derivatives journey highlights how product design, liquidity depth, and participant diversity can reshape competitive dynamics—even in a regulated environment.
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