Derivatives decline: Where did F&O volumes disappear?
Live MintWith trading volumes in futures and options shrinking dramatically, a pressing question emerges: where did these volumes go? To protect investors and rein in speculative trading, India’s markets regulator took decisive measures targeting the derivatives segment, including reducing weekly option products that dominated trading volumes. A trend emerging from this data is a likely shift of trading volumes from index derivatives to the small-cap cash market, said Hitesh Jain, lead analyst at YES Securities. No correlation According to Chandan Taparia, head of derivatives wealth management at Motilal Oswal Financial Services Ltd, the decline in F&O volumes does not imply that these volumes have shifted to the small-cap cash market. While F&O trading primarily caters to those seeking quick gains, the cash market, particularly in the small-cap segment, focuses on value and sometimes momentum investing to achieve higher returns, he explained.