Now Reading: BSE sees fewer contracts but premiums surge 75% after CAS
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BSE sees fewer contracts but premiums surge 75% after CAS
BSE’s average daily derivatives contracts fell 30.6% week-on-week to 90 million in the first week of the Closing Auction Session (CAS), but the premium per contract surged 74.8% to Rs 2,605, according…
The Story in Brief
BSE’s average daily derivatives contracts fell 30.6% week-on-week to 90 million in the first week of the Closing Auction Session (CAS), but the premium per contract surged 74.8% to Rs 2,605, according to Nuvama Institutional Equities. The jump in premiums helped BSE’s average daily premium turnover value rise 21.3% to Rs 23,500 crore, lifting its market share by 362 basis points to 37.1%.
CAS, introduced by Sebi and NSE from August 3, uses a 20-minute auction after regular trading to determine closing prices for eligible F&O stocks, replacing the earlier volume-weighted average method. The change is meant to curb last-minute price swings, but has provoked trader backlash over higher costs and reduced volumes.
The Indian Opinion
Cheerleaders call CAS a triumph against last-minute manipulation; critics say it has crushed volumes. Both miss the point. Premiums shot up because traders shifted to deep out-of-the-money options, not because liquidity improved. The real test is whether this pattern becomes the new normal. Watch BSE’s contract count for the next month, if it stabilises above 100 million, fears of a desert may prove overblown. If it keeps sliding, Sebi’s fix will need fixing.
Source: economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
