India’s National Stock Exchange (NSE) has been named as the world’s largest derivatives market place for 2021, for the third year in a row. NSE is the largest global exchange in terms of number of contracts traded, the Futures Industry Association (FIA) said. NSE has also been ranked as the fourth largest exchange in the world for trading cash equities for 2021.
In terms of sheer value traded, the NSE has a monopoly over equity derivatives in India and the only competitor to it is BSE, which has less than 5 per cent share in the derivative segment. FIA data shows that NSE was the global leader in trading equity index options and currency options in terms of number of contracts.
NSE reported a total trading volume of 17.26 billion contracts in 2021, almost double the amount traded in the previous year, FIA said. The data showed that globally equity-related derivatives accounted for the majority of the increase in trading activity in 2021. Futures and options in this category reached 41.6 billion contracts traded in 2021, an increase of 46.7 per cent from 2020. FIA said trading of interest rate futures and options picked up after several years of depressed activity. Volume in this category reached 4.58 billion contracts in 2021, up 11.2 per cent from the previous year.
Brazil’s B3 exchange was ranked second and its total trading volume rose by 38 per cent to 8.76 billion. CME Group in the US came third, with a total volume of 4.94 billion, up 2.5 per cent from the previous year. Intercontinental Exchange came in fourth, with volume rising 19 per cent to 3.32 billion contracts. Close behind was Nasdaq, with volume rising 23.8 per cent to 3.29 billion contracts.
The OCC in the US continued to rank as the world’s largest clearinghouse for derivatives in terms of open interest. The OCC, which provides clearing for more than a dozen trading venues in the US, held 454.79 million in open positions at year-end, up 15.2 per cent from December 2020, and more than twice as many as any other derivatives clearinghouse.
On the NSE, the trading in index options contracts on Nifty Bank index was on the top globally, followed by the Nifty 50 index. The US Dollar – Indian Rupee options contract ranks first by number of contracts traded in the currency options category.
NSE recently had said it got approval from the Securities and Exchange Board of India (SEBI) to launch derivatives on Nifty MidCap Select Index, which will start trading from January 24.
NSE data shows that in the past 10 years, the equity derivatives daily average turnover increased by 4.2 times to ₹1,41,267 crore. During the same period, the cash market daily average turnover increased by 6.2 times to ₹69,644 crore. In currency derivatives, the daily average turnover increased by 83 per cent to ₹26,017 crore.
January 19, 2022