Explained: How BSE traded fewer contracts after CAS but premiums rose 75% in first week
BSE’s derivatives activity fell sharply in the first week of the Closing Auction Session, but higher premiums more than offset the decline in contracts. Premium per contract surged 74.8%, lifting average daily premium turnover 21.3% and pushing BSE’s market share to 37.1%, according to Nuvama Institutional Equities.
The Bombay Stock Exchange (BSE), Asia's oldest exchange, saw a significant drop in the number of derivatives contracts traded after implementing the Closing Auction Session (CAS) on August 3. Despite this decline, premiums generated from these contracts surged by 75% in the first week of implementation. Nuvama Institutional Equities reported that the average daily contracts traded fell 30.6% week-on-week to 90 million, in contrast to a 20.4% decline for the industry.
The average daily premium turnover value rose 21.3% week-on-week to Rs 23,500 crore, surpassing the industry growth of 9.5%. BSE's market share in terms of daily premium turnover increased to 37.1%, a jump of 362 basis points week-on-week. The Closing Auction Session, introduced by the Securities and Exchange Board of India (SEBI) and the National Stock Exchange (NSE), alters the way closing prices are determined for eligible Futures & Options (F&O) stocks, extending equity derivatives trading by 10 minutes.
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