F&O: BSE Bankex contracts to expire on Mondays from October 16, exchange says

The expiry day for BSE Bankex derivatives contracts would be revised to Mondays effective October 16, the stock exchange said in a circular on August 30. At present, BSE Bankex contracts expires on Friday. "New contracts of S&P BSE Bankex with Monday expiry will be generated on October 13, end of day and will be available for trading with effect from October 16," a media report quoted the exchange as saying.

There is no change as far as the expiry day of Sensex derivative contracts are concerned. They expire on Fridays.

To recall, BSE had in May this year relaunched Sensex and Bankex derivative contracts in its bid to boost derivative trading at the exchange. The relaunch of derivative contracts had come with a reduced lot size of futures and options and a new expiry cycle of Friday from Thursday earlier.

This was followed by NSE's announcement, wherein the peer bourse moved the expiry day for Nifty Bank future & options contracts to Friday from Thursday, effective from trade date July 7. The first Friday expiry for Nifty Bank was on July 14.

Derivatives are the type of financial contracts whose value is dependent on an underlying asset, group of assets, or benchmark. A derivative is set between two or more parties that can trade on an exchange or over the counter (OTC). Derivatives are usually leveraged instruments, which increases their potential risk and reward. Usually, they are used to hedge against the risk against the assets in the equity markets.

HDFC Institutional Equities on Wednesday noted that BSE's market share in the  equity derivatives segment reached 3.4 per cent in August against nil in April. BSE's expiry day market share has reached 11 per cent without any liquidity enhancement  scheme (LES), HDFC Institutional Equities noted.

The derivatives volume is organic and is driven by 219 members  (proprietary and retail) and the active UCCs on the BSE derivatives platform  have reached 0.17 million, from nearly zero in three months.  "We expect BSE derivative market share to reach 10 per cent in Q4FY24E, driven by the on-boarding  of large member brokers, the launch of new weekly index contracts, hedging activity and a continued increase in active traders. The increase in derivatives  volume will boost cash volumes," it said.

HDFC Institutional Equities said the steps taken by the new BSE management are yielding results and will boost growth and margin.

"We expect a revenue/EPS CAGR of 19/25 per cent over FY23-26E, led by a revival in transaction revenue. We increase our EPS estimates by 7/11 per cent for FY24/25E, increase core multiple to 28 times (vs 25 times), and upgrade rating to BUY. We assign a SoTP-based target price of Rs1,230," it said.

The NSE-listed BSE was trading 6.9 per cent higher at Rs 972.75 apiece.

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