MUMBAI: The Bombay Stock Exchange (BSE) will add 135 stocks to its futures and options segment from August 2011, following a recent regulatory move to allow bourses to offer incentives to brokers for generating volumes in illiquid derivatives contracts. The step has raised hopes of reviving the BSE's near-dormant F&O segment.
"With recent positive developments designed to augment trading in F&O, we are working towards making the BSE market-ready for increased participation in our equity derivatives business," said the exchange's CEO, Madhu Kannan, in a release.
The BSE has 84 stocks in addition to a few indices in its F&O segment, which clocked an average daily turnover of Rs 18 crore in the past one month. In comparison, the NSE's average daily turnover was Rs 1 lakh crore in the period.
Brokers said the so-called liquidity enhancement scheme presents an opportunity for the BSE to capture a portion of its rival's dominant market share.
"The chance of a revival of the BSE's equity derivatives segment has been enchanced 100-fold after the introduction of the liquidity enhancement scheme," said Rajesh Baheti, MD, Crosseas Capital. "Though the scheme may not be a success immediately, it is certainly promising as liquidity begets liquidity," he said. Brokers said even the NSE may benefit from the liquidity enhancement schemes.
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