Mumbai: Equity derivative segment on the nation's bourses recorded a turnover 12.6 times of the cash market in 2012-13, with futures and options trading on the BSE recording a sharp increase on the back of incentive schemes.
The total turnover in equity derivative market rose by 20.4 percent and reached Rs 387 lakh crore in 2012-13, as per Securities and Exchange Board of India latest annual report.
"The equity derivative segment is the most vibrant, active and dominant segment in the Indian securities market," Sebi said in the report.
"Volumes of derivatives market have far exceeded that of cash segment that as at close of 2012-13, the turnover in the derivatives market was 12.6 times of the latter," it said.
The cash turnover at stock exchanges stood at Rs 32.61 lakh crore in 2012-13 fiscal.
Primarily driven by incentives it had offered, BSE's turnover increased massively from Rs 8.08 lakh crore in 2011-12 to Rs 71.63 lakh crore in the last fiscal.
The trading volumes on the bourse also steeply climbed to 26.24 crore from 3.22 crore in the period under review.
The incentives schemes include 'Liquidity Enhancement Incentive Programmes' or LEIPs.
In the cash segment, the investors and traders buy and sell shares of the companies, while in the derivatives market the trading takes place in forward futures and options contracts of individual stocks and indices.
According to the data compiled by the regulator, the National Stock Exchange (NSE) continued to dominate trading in derivative segment. However, its total share in the futures and options turnover declined to 81.5 percent in 2012-13 as against 99 percent in the previous fiscal.
Derivative turnover on the NSE increased marginally to Rs 315 lakh crore while the number of contracts traded on the exchange declined 6.1 percent to 113 crore in 2012-13.
The newest bourse MCX-SX, which was launched in February of 2013 recorded volumes and turnover of 2.75 lakh and Rs 8,049 crore respectively.
Proprietary trades accounts had the largest share in the derivative turnover on NSE and BSE. They accounted for 46 percent on the NSE and represented 76 percent on the BSE.
Foreign Institutional Investors (FII) accounted for 16 percent and one percent on the NSE and BSE respectively.
According to Sebi, the product composition in derivatives market has undergone drastic change since 2006-07 when single stock futures was the most traded product in India.
In 2012-13, index options comprised the largest share (77 percent) in turnover, while share of single stock futures has decreased substantially to 10.9 percent, Sebi said.
Futures and options are generally contracts based on a particular stock or index.
Index futures comprised 6.8 percent of the turnover while share of stock options rose to 5.2 percent in the last financial year.
First Published: Monday, September 16, 2013, 18:56