Index options turnover hit by conflict, Sebi investigation

Options trading activity on both BSE and National Stock Exchange (NSE) plummeted to nearly four-month lows in the second week of June, as a sharp decline in trader participation coincided with the escalating Middle East conflict.

- Ram Sahgal

A regulatory overhang from a high-frequency trading investigation might have also contributed, market experts said.

Analysts said that many traders have opted to sit on the fence for a bit till greater clarity emerges on both fronts.

During 9-13 June, BSE witnessed a 39% fall in average daily premium turnover (ADPT) of Sensex options to ₹10,511.48 crore from an average ₹17,187 crore the week prior (2-6 June). In the same period, NSE's Nifty ADPT sank 21% to ₹36,045 crore from ₹45,746 crore.

This was the lowest weekly average premium turnover for both exchanges since the week of 24-28 February. In that week, BSE had posted a turnover of ₹8,857 crore, and NSE ₹32,686 crore, data from the exchanges show.

"There is a risk-off, given the heightened geopolitical uncertainty, which resulted in lower volumes," said Rajesh Baheti, managing director of Crosseas Capital, one of the country's leading proprietary traders.