Over the past four trading sessions, MCX shares have declined nearly 10 per cent, while BSE has fallen around 8 per cent over the same period.
What is proprietary trading?
Proprietary trading refers to trades done by brokers and other financial institutions using their own capital. In other words, proprietary trading involves financial institutions like stock brokers using their own funds to trade and earn profits.
Analysts said that the impact on the market because of the new norms is visible with a drop in trading volumes. Post implementation of the new norms, volumes on BSE on the first two trading days in July fell between 7 per cent and 10 per cent compared to the same days in the previous week.
The options premium average daily turnover (ADT) for MCX fell nearly 40 per cent to ₹5,632 crore in the first three trading days in July, compared to ₹9,338 crore in the previous month.
Sunny Agrawal, head of fundamental research at SBI Securities, said that MCX’s overall ADT has dipped due to new Bank Guarantee (BG) rules from the RBI, where BG issued to brokers must now be backed by 100 per cent collateral against 50 per cent previously. Options Notional ADT has declined 71 per cent M-o-M while Options Premium average daily turnover (ADTO) is down 40 per cent M-o-M.
According to Jefferies, NSE’s higher clearing market share and premium to notional turnover in equity options has resulted in higher profitability relative to BSE.
NSE is targeting to launch its IPO, estimated at around ₹30,000 crore, in September. The listing will bring all three major exchange operators onto Dalal Street.
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