Derivatives volumes rebound at NSE, BSE in April–May before easing in June: ICICI Securities

India’s leading stock exchanges, NSE and BSE, witnessed a strong recovery in derivatives trading volumes during April and May 2025, following a subdued second half of FY25. However, this momentum tapered off in early June, according to a report by ICICI Securities. The rebound was driven by improved market sentiment, regulatory clarity, and increased retail participation, though recent data suggests a cooling trend as traders reassess positions amid global uncertainties.  

Key observations from the volume trends  

- NSE’s options premium average daily traded value (ADTV) for April and May rose to Rs 589 billion, up 5 percent from H2FY25  
- BSE saw a sharper surge, with its options premium ADTV jumping 52.8 percent to Rs 157 billion over the same period  
- In contrast, the first two weeks of June saw a decline: NSE’s premium ADTV dropped 18.7 percent month-on-month to Rs 485 billion, while BSE’s fell 12.8 percent to Rs 138 billion  
- Notional ADTV also declined, with NSE down 7.1 percent to Rs 204 trillion and BSE down 4.5 percent to Rs 121 trillion  

Cash segment performance  

- NSE’s cash segment ADTV increased 6.2 percent in April–May to Rs 1,060 billion, and further rose 4.9 percent in June to Rs 1,165 billion  
- BSE’s cash ADTV climbed 10.7 percent to Rs 68 billion in April–May and surged 16 percent in June to Rs 87 billion  
- Despite the uptick, current volumes remain nearly 25 percent below their June 2024 peak  

Regulatory developments and market participation  

- The rebound coincided with the implementation of SEBI’s New Risk Monitoring Framework in May and the finalization of the equity derivative expiry structure in June  
- Monthly participants in NSE’s equity derivatives segment rose to 3.31 million in April after five months of decline, though still below the June 2024 high of 5.26 million  
- The average trade size in NSE index options has been increasing since the rollout of new regulations in November 2024  

Future outlook  

While April and May marked a strong recovery in derivatives activity, the early June slowdown suggests a cautious stance among traders amid evolving macroeconomic cues. Analysts expect volume trends to stabilize as the market adjusts to the new expiry framework and awaits further regulatory clarity.  

Sources: Moneycontrol, ICICI Securities