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NSE emerge as world’s largest derivatives exchange for the 3rd time

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Guwahati: The National Stock Exchange of India has emerged as the world’s largest derivatives exchange for the third consecutive year in 2021 in terms of the number of contracts traded, according to the Futures Industry Association (FIA), a derivatives trade body.

NSE is ranked fourth in the world in cash equities by the number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for the year 2021.

Commenting on the occasion, Vikram Limaye, MD & CEO, NSE said: “It is a matter of great pride for us and 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 third consecutive year and the fourth-largest exchange in cash equities by the number of trades.”

NSE is ranked as the largest exchange globally in equity derivatives as well as currency derivatives by the number of contracts traded, the NSE stated in a press release.

At the instrument level, NSE ranks first in index options and currency options by the number of contracts traded. The index options contracts on the Nifty Bank index rank first and the Nifty 50 index ranks second globally within the index options category by the number of contracts traded. The US Dollar-India and Rupee options contract ranks first by the number of contracts traded in the currency options category, the release said.

The year 2021 witnessed a total registered investor base on NSE surpassing the 5-crore mark to reach a count of 5.5 crore investors. The foreign portfolio investors brought in net inflows inequities for the third consecutive year-Rs 1,01,122 crore in 2019, Rs 1,70,262 crore in 2020, and Rs 25,752 crore in 2021.

In the last 10 years, the equity derivatives daily average turnover increased by 4.2 times from Rs 33,305 crore in 2011 to Rs 1,41,267 crore in 2021. During the same period, the cash market daily average turnover increased by 6.2 times from Rs 11,187 crore in 2011 to Rs 69,644 crore in 2021.

The equity derivatives to cash market turnover ratio have 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 percent from Rs 14,252 crore in 2011 to Rs 26,017 crore in 2021.

The 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, the release added.

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