News and research and info about markets
Anyone else know about this…?!
The National Stock Exchange of India overtook the CME Group to become the largest derivatives exchange in the world in 2019. Mumbai-based NSE traded 5.96 trillion contracts in 2019 to CME Group’s 4.83 trillion.
I had no idea that India had such a strong position in global derivatives
This might explain at least part of the growth…
India has one of the largest and most liquid single-stock futures markets globally, largly as a result of investors wanting leverage and to save on security transaction tax (STT), which with a couple of other fees adds up to a cost of around 11bps each side of buying and selling single stock shares, plus commissions.
That’s a super interesting, if jargon-filled, read. What you highlighted, along with the next paragraph really does explain that. Everyone thinks London or Wallstreet when they think financial hub, but it’s easy to forget that there are different regulatory areas and special economic zones in unexpected places.
“Indian single-stock futures offer leveraged exposure, with only about 10% margin being posted, and incur 1bp STT market charges each side versus 11bps on cash trades,” says Rossiter. “So at only a tenth of the cost, and a tenth of the value needed for margining, it’s an attractive proposition for short-term traders and arbitragers.”