Options turnover on NSE plunges to lowest this year

The shrinking options trade is bad news for NSE as it prepares for what would be India’s biggest initial share sale.
| Photo Credit:
FRANCIS MASCARENHAS

Options turnover on India’s biggest stock exchange fell to the lowest this year on monthly expiry day, reflecting the impact of the stricter trading rules and the introduction of the closing-auction system in the world’s largest equity derivatives market.

Premium turnover on the National Stock Exchange of India Ltd declined to about ₹67,000 crore ($7 billion) on Tuesday, the lowest since December, according to bourse data. Volumes in cash equities trading — where the exchange holds more than 90 per cent of the domestic market share – fell to the lowest since November. 

The decline reflects the cumulative impact of measures aimed at cooling India’s once-frenetic derivatives market, including reducing the number of weekly expiries and increasing contract sizes and curbing bank funding to proprietary trading firms.

The shrinking options trade is bad news for NSE as it prepares for what would be India’s biggest initial share sale. Options generated about ₹10,000 crore in transaction charges in the year ended March, accounting for 60 per cent of revenue from operations, according to NSE’s IPO filing. 

“The decline in options volumes is a challenge for NSE ahead of its IPO,” Kranthi Bathini, equity strategist at WealthMills Securities. “But we see this as a short-term hiccup rather than a long-term concern.”

The rollout earlier this month of the auction mechanism to set closing share prices has reshaped expiry-day strategies, triggering sharp stock moves during the process. Institutional and retail traders have largely stayed away from the auction — held between 3:15 p.m. and 3:35 p.m to determine closing prices of more than 200 stocks — as the market adjusts to the new system.

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Published on August 27, 2026