Copyright © HT Digital Streams Limit all rights reserved. Uncertain times: Here is why the trading of index options on Dalal Street Ram Sahgal read 3 min 3 min, 19 Jun 2025, 05:30, the IST analysts said that many traders chose to sit on the fence until greater clarity on both fronts. (Bloomberg) Summary of tensions in the middle of the Middle East increases a risk-off sentiment among options traders, which caused almost 40% volumes dip for BSE and 21% for NSE in the second week of June options operating activity on both BSE and the National Stock Exchange (NSE) dropped in the second week of June The Middle East. A regulatory overhang of a high-frequency trading investigation may also have contributed to this, Market experts said. Analysts said many traders chose to put a little on the fence until greater clarity on both fronts emerged. During June 9-13, BSE Witness was of a 39% drop in the average daily premium turnover (ADPT) of Sensex options to £ 10,511.48 crore of an average £ 17.187 crore the week before (June 2-6). In the same period, the ADPT of NSE sank 21% to £ 36,045 from £ 45,746. It was the lowest weekly average premium turnover for both exchanges since the week of February 24-28. In that week, BSE placed a turnover of £ 8,857 crore, and the NSE £ 32,686 crore, according to the exchanges. Read also | The horror performance in Dalal Street as the US, Japan has haunted investors “there is a risk-down, given the increased geopolitical uncertainty, which led to lower volumes,” said Rajesh Baheti, managing director of Croseas Capital, one of the country’s leading property traders. Jyoti Jaipuria, founder and managing director of Valentis Advisors, added that the Middle East created decisions in the minds of traders, because one day you hear about conversations and the next of kin that negotiations are off the table “. The conflict, which has begun with Israel since last Thursday to bump core and military assets in Iran and Iran then retaliates, entered its sixth day on Wednesday, despite US President Donald Trump who warned the Iranian regime to surrender unconditionally. According to Rajesh Palviya, derivative head of research at Axis Securities, the uncertain situation has caused rapid fluctuations in volatility, causing many options traders to “put on the sidelines until greater brightness emerges”. Read it | BSE, NSE has cut access to the website outside India before ‘Operation Sindoor’ Fear Gauge India VIX, which increases as market uncertainty increases and drops as the confidence increases, fell on June 9 to 13.66 on June 11, only to jump on June 13, a day after the Middle East conflict began. It closed at 14.27 on Wednesday, Bloomberg data showed. VIX is calculated based on options prices. Options traders generally sell calls and place when volatility is high, allowing a decline in volatility to enable them to enable the premiums paid by Options buyers. But if volatility changes regularly amid a potential market -moving event, there may be less participation by options traders. Volatility measures the rate and size of the changes in asset prices. For example, if Iran comes to the negotiating table, a risk-on-sentiment would return, but if the war extends, a risk-off sentiment arises, making it more difficult for traders to make money, explains SK Joshi, consultant at Khambatta Securities. “That’s when aggressive trade stops and volumes drop,” he said. There is another angle, also another reason that is partly attributed to the sharp decline in volumes, is an investigation into trades managed by a major foreign high -frequency trader (HFT), which led to an element of caution that specialized in India’s own traders, which specializes in India. “Big Prorerkans have abandoned some of the traders who employ them, and the news of Sebi has investigated a major international HFT that allegedly manipulated the index movements through intraday strategies,” says Bansal. “They are waiting for this overhang to subside before appointing more people to drive intraday ambush.” Read also | Market Fear Gauge Vix sees the sharpest drop over 5 years. Know why a Sebi official was not immediately available for comment, a person who was aware of the development confirmed the investigation. The trading in stock -derived instruments forms a large part of the exchange transaction costs, the mainstay of the revenue of a scholarship. The data of the stock advisory firm Equentis shows that derivatives, the options of which are an important part, contributed 24% to BSE’s transaction revenue of £ 708 crore in FY24, when the exchange’s derivative segment in FY25 began to draw, and 85% of the £ 2.029 crore in FY25, with cash. In the case of NSE estimates equentis that derivatives contributed to 89% of the transaction fees of £ 12.120 crore in FY24 and 87% of £ 13,509 crore in the previous fiscal. And read | NSE investors are holding on now, as the price increases in Gray Market catch all the business news, market news, news events and latest news updates on live mint. Download the Mint News app to get daily market updates. More Topics #Markets Read Next Story
Here is the reason why the trading of index options is dropping
