NSE vs BSE: Sebi’s curbs, exchange moves reshape options market

A look at six-month options premium turnover data shows the country’s older exchange, BSE, has outperformed its bigger rival NSE in the six months leading to 7 March, compared to the corresponding period in the previous fiscal year, albeit on a lower base. This has offset the fallout from the curbs introduced by Securities and Exchange Board of India (Sebi)—overall premium turnover has fallen less than 3% in the second half of the current fiscal (Oct to five sessions of March) from the same period of the previous fiscal.

The average daily turnover or ADT (options premium based) of index and single stock options on BSE jumped almost threefold y-o-y to ₹9,943 crore between October and 7 March of the current fiscal (FY25). In contrast, NSE combined options’ ADT (premium) fell 13% to ₹56,681 crore from October to five trading sessions of March from the comparative period last fiscal (FY24).

The data highlights the growing competition among the stock exchanges as they vie for a larger share of the derivatives market. This rivalry has now intensified with the NSE deciding to shift its options expiry day to one day before BSE’s options expire, sending the latter back to the drawing board to consult stakeholders.

Also read: Mint Explainer: How Sebi's new proposals aim to curb risks in the derivatives market

“Sebi’s (Securities and Exchange Board of India) curbs seemed to have had a favourable impact on BSE, which had one liquid weekly contract (Sensex), as opposed to NSE, which had four liquid weekly contracts," said Rajesh Baheti, founder and managing director of Crosseas Capital. “Post the curbs, BSE has got traction on a lower base while NSE has been impacted more adversely."

Meanwhile, the combined index and stock options’ ADT has fallen by just 2.9% to ₹66,624 crore from October through 7 March this fiscal (FY25) from a combined ₹68,617 crore in the corresponding period of FY24, data from NSE and BSE shows.

To be sure, while the NSE has witnessed a sharper decline in trading volumes, the steep rise in BSE’s turnover has significantly cushioned the impact of restrictions brought in by Sebi.

Expiry day rivalry

Meanwhile, the NSE has decided to shift the expiry day of its weekly Nifty derivatives contract from Thursday to Monday, effective 4 April. All other NSE derivatives contracts with different tenures will now expire on the last Monday of the expiry month, per an NSE circular of 4 March.

This change places NSE’s expiry just a day before the BSE's weekly Sensex options contracts, which expire on Tuesdays—raising concerns among BSE stakeholders about potential market disruptions. BSE’s managing director & CEO S. Ramamurthy told Mint that the ramification of NSE’s move on BSE and its response would have to be discussed “internally, post consultation with its member-brokers".

On the other hand, Ashishkumar Chauhan, MD and CEO of NSE, pitched for same-day expiry for multiple exchanges at a recent media event.

“Whatever was Sebi's perspective of reducing daily expiry, I don’t think is going to be met if we continue to have multiple exchanges having expiries on different days," Chauhan said at the Moneycontrol Global Wealth Summit 2025. “If you want to really remove that, you need to have one single day (of expiry)."

Also read: How Sebi’s serial crackdown crimped F&O volumes and crashed broking-firm stocks

Chauhan said that currently there were two exchanges offering expiries on different days of a week, but if the three other exchanges (NCDEX, MCX, and MSEI) also ask for expiries, one would end up with expiries on five days, which would beat Sebi's perspective of limiting the number of expiries in a week.

He quipped that a new sixth and seventh national exchange could ask for trading on Saturday and Sunday and an eight exchange could demand another day to be added to a week.

Sebi's curbs

Sebi had introduced six regulatory measures starting 1 October last year to curb excessive retail participation in options trading on expiry days.

Among these, three key changes impacted trading volumes: restricting weekly contract expiries to just one per exchange (down from multiple expiries earlier); nearly tripling the contract size; and implementing additional margin requirements on expiry days in a phased manner over the past six months. These measures collectively contributed to the decline in overall trading volumes.

Also read: Sebi goes after Asmita Patel—‘she-wolf' of the stock market

Incidentally, Sebi’s wholetime member Ananth Narayan recently stressed that Sebi was not against any market segment but simply wanted to curb excesses on weekly option expiry days.

The curbs were introduced to prevent excessive trading by retail investors, particularly on expiry days, after regulatory findings revealed that individual investors lost a staggering ₹1.8 trillion from FY22 through FY24 (three years) due to excessive trading of options.