Wow that seems that our benchmark indices are on a roll. But what we see is Nifty down 35 points and we are still below the high of 2008.
The link like this
and many more which you will keep seeing every expiry are very well ignored.
This is a little break up of todays volumes.
Derivative Volumes
NSE
Index Futures - 14501.55 cr
Stock Futures - 37639.97 cr
Index Options - 164408.21 cr
Stock Options - 11219.95 cr
Total Turnover - 227769.68 Crores
BSE
Index Futures - 306.25 cr
Index Options – 171920 cr
Equity Futures – 2.09 cr
Equity Options – 41 cr
Total Turnover – 172278.76 cr
According to me the real volumes are done in Cash Segment which is terribly low at 3000 crores odd for BSE and 13000 crores odd for NSE.
Now surprisingly the real volumes is not even 5% of the total turnover. What comes out is Options is the Highest Turnover.
As a matter of fact it is not. Because The Turnover which CNBC or Economic Times or Business Standard shouts is nothing but Notional Turnover figure.
For example -
One of the normal trades today could be buying a 5900 Call Option at 15 rs. So you have effectively paid a premium of 15 * 50 = 750 rs.
So ideally your turnover would be only 750 rs !!
But in terms of the notional calculation = ( Strike Price + Premium ) * lot size = (5900 + 15 ) * 50 = 295750
Now thats how we suddenly get to 1.65 lakh crores of Nifty Options traded which may not even be lesser than 1000 crores.
Out of this 70 % of the trades today were in the near strikes of 5900/6000.
Conclusion -
The TV anchors will keep shouting 4 lakh crores or 6 lakh crores and numbers will increase but in real terms the Cash volumes of not more than 20000 crores ( combined BSE/NSE ) is still much below the average of good times. There was also a time when BSE had beaten NSE on cash volumes :).
So next time you hear highest volumes just give it a skip 🙂 and look at cash volumes.
Nooresh Merani - An IT engineer by qualification and Advisor/Trainer by profession.