Stock options saw a 42 per cent y-o-y increase in premium turnover, rising to nearly ₹8,000 crore per day, while index futures rose by 17 per cent y-o-y to just over ₹35,000 crore

The average daily premium for index options on the National Stock Exchange has taken a sharp hit last fiscal, declining 42 per cent from a peak of over ₹78,000 crore in June last year, reflecting the impact of the recent regulatory measures to enhance investor protection in index derivatives. Year on year, the decline was 3 per cent even as other derivative segments posted a growth.

Stock futures witnessed a 45 per cent y-o-y growth, reaching a daily turnover of just over ₹1.5 lakh crore in FY25. Stock options saw a 42 per cent y-o-y increase in premium turnover, rising to nearly ₹8,000 crore per day, while index futures rose by 17 per cent y-o-y to just over ₹35,000 crore.

Within index options, Nifty’s share of the overall premium turnover in FY25 grew to 47 per cent, up from 33 per cent in FY24. Its daily average premium turnover rose 37 per cent y-o-y. Bank Nifty’s share declined to 40 per cent from 54 per cent the previous fiscal, with a 29 per cent y-o-y drop in its daily average turnover. The drop was due to discontinuation of Bank Nifty weekly contracts following SEBI diktat to have weekly contracts only on one index. NSE preferred to keep weekly contracts on Nifty. The overall share of weekly options in index derivatives declined to 67 per cent in FY25 (from 70 per cent in FY24).

Investor composition

The equity derivatives segment saw a notable shift in investor composition in FY25, led by a significant expansion in the share of foreign investors. Their share in equity futures turnover rose by 406 bps y-o-y to exceed 25 per cent, while in equity options (premium turnover), their share rose by 99 bps to 9.6 per cent. Within equity futures, the rise was particularly higher in stock futures, where the foreign investor share surged 432 bps y-o-y to cross 28 per cent — the highest annual level recorded to date.

Despite regulatory measures, individual investors’ share of participation in index futures and index options rose by 91 bps y-o-y and 69 bps y-o-y respectively, reaching 31 per cent and 36 per cent. Conversely, their share dropped by 142 bps and 265 bps in stock futures and stock options, settling at 15 per cent and 27 per cent,respectively. The share of proprietary traders declined across all equity derivative segments during the year.

Average trade size

The average trade size for index options (calculated based on premiums) rose 3 per cent in FY25 to ₹6,075, while that for stock options reduced 5.2 per cent to ₹14,568. The average trade size for index futures dipped marginally, while that for stock futures dipped 7 per cent to ₹8.85 lakh.

Published on April 29, 2025