NSE is the world's largest derivatives exchange for the 3rd consecutive year

20 Jan 2022 , 11:07 AM

National Stock Exchange of India Ltd. (NSE) has emerged as the world’s largest derivatives exchange in 2021 by number of contracts traded based on the statistics maintained by Futures Industry Association (FIA), a derivatives trade body. NSE is ranked 4th in the world in cash equities by number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for the calendar year 2021.

Commenting on the occasion, Mr. Vikram Limaye, MD & CEO, NSE said: “It is a matter of great pride for us and for our country that NSE has emerged as a global leader and achieved the distinction of being the largest derivatives exchange in the world for the 3rd consecutive year and the 4th largest exchange in cash equities by number of trades. We are truly grateful to the Government of India, Securities & Exchange Board of India, Reserve Bank of India, trading & clearing members, market participants and all our stakeholders for the support extended to us over the years. Our achievements would not have been possible without their support.”

NSE is ranked as the largest exchange globally in equity derivatives as well as currency derivatives by number of contracts traded. At the instrument level, NSE ranks 1st in index options and currency options by number of contracts traded. The index options contracts on Nifty Bank index ranks 1st and Nifty 50 index ranks 2nd globally within the index options category by number of contracts traded. The US Dollar — Indian Rupee options contract ranks 1st by number of contracts traded in the currency options category.

The year 2021 witnessed total registered investor base on NSE surpassing the 5-crore mark to reach a count of 5.5 crore investors. Foreign Portfolio investors brought in net inflows in equities for the 3rd consecutive calendar year — Rs 1,01,122 crores in 2019, Rs 1,70,262 crores in 2020 and Rs 25,752 crores in 2021.

In the last 10 years, the equity derivatives daily average turnover increased by 4.2 times from Rs 33,305 crores in 2011 to Rs 1,41,267 crores in 2021. During the same period, the cash market daily average turnover increased by 6.2 times from Rs 11,187 crores in 2011 to Rs 69,644 crores in 2021. The equity derivatives to cash market turnover ratio has steadily declined from 2.98 in 2011 to 2.03 in 2021. Academic research has shown that a well-functioning derivatives market can offer a variety of benefits, including improved liquidity and enhanced price discovery for the underlying assets.

In currency derivatives, the daily average turnover increased by 83% from Rs 14,252 crores in 2011 to Rs 26,017 crores in 2021. NSE had launched weekly futures on the most active US Dollar — Indian Rupee currency pair. FCYINR pairs other than USD-INR such as the GBP-INR, EUR-INR and JPY-INR have also seen significant growth in volumes over the years with daily average turnover increasing by 7 times from Rs 783 crores in 2011 to Rs 5,525 crores in 2021.

NSE has recently announced the launch of derivatives on the Nifty Midcap Select index from January 24, 2022. The midcap segment has come into focus in the recent equity market rally with broad based participation from all classes of investors resulting in improved liquidity in these stocks.