Key Points
Notwithstanding the fact that retail options traders make losses in more than 80% of their bets, derivative volumes are now 400x that of cash equity and 900x of delivery-based trading volumes, the highest ratio in the world...
"In most markets, derivatives volumes now account for 5-15x their cash market volumes..
In India today, however, derivative volumes are more than 400x higher than that of the underlying cash market today, having grown from 3x in 2010..
Total derivatives volumes have risen to over $ 4.3 trillion per day roughly translating to 125% of the underlying companies' market capitalisation or over 200% of its free float being traded every day," Axis Mutual Fund CIO Ashish Gupta said...
This, in conjunction with sachetization, has attracted a younger demographic as well as clients from Tier II and III cities," the study said.. Index options are the preferred choice in India, constituting 99% of derivative volumes, and within this, weekly accounts for 95% of the trades..
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