India Now Has World’s Largest Derivatives Exchange by Volume
Volume on the Indian exchange grew 58% to about 6 billion derivative contracts in 2019, according to FIA’s website.
(Bloomberg) -- India’s National Stock Exchange has surpassed America’s CME Group Inc. to become the world’s largest derivatives bourse by volume.
Mumbai-based NSE traded the most contracts in the world last year, the exchange said in a statement, citing data from the Futures Industry Association. Volume on the Indian exchange grew 58% to about 6 billion derivative contracts in 2019, surpassing CME’s 4.83 billion, according to FIA’s website.
| Exchange | 2019 volumes (billion contracts) |
|---|---|
| NSE | 5.96 |
| CME Group | 4.83 |
| B3 | 3.88 |
| Intercontinental Exchange | 2.26 |
| Eurex | 1.95 |
| Source: Futures Industry Association |
NSE added that the growth in volumes has come on the back of new investor registrations and as derivatives to cash market turnover ratio has consistently remained around 3 times. India’s stock market value of $2.2 trillion pales in comparison with the U.S.’s $35.5 trillion.
“It is a nice milestone but it also shows that the speculative activity is increasing in India and the cash market is not performing,” said Deven Choksey, who oversees investment and research at K.R. Choksey Shares and Securities Pvt. The next big milestone for NSE will come when there is more delivery-based settlement in derivatives, he added.
The NSE won the crown for derivatives volumes in a year that marked the end of a feud with the Singapore Exchange Ltd. over the latter’s plans to introduce single-stock futures based on some of India’s largest companies.
That dispute ended in August last year after the two countries approved the creation of a stock-trading link in Indian Prime Minister Narendra Modi’s home state of Gujarat.
SGX-Nifty daily futures trading of about $1.8 billion is likely to shift to the Gujarat International Finance Tec-City -- or the Gift City -- once the link is ready, Vikram Limaye, chief executive officer of the NSE, said last year.
To contact the reporters on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net;Ashutosh Joshi in Mumbai at ajoshi86@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Jeanette Rodrigues
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