BSE to Offer India Volatility Index Futures to Counter NSE Move

The BSE Ltd., Asia’s oldest stock exchange, will introduce futures tied to a gauge for historical volatility after rival National Stock Exchange of India Ltd. today started trading contracts tied to the India VIX index.

The bourse soon will seek approval from regulators to begin trading futures on the REALVOL Index, Chief Executive Officer Ashishkumar Chauhan told reporters in Mumbai today.

The BSE is trying to gain market share from the NSE, whose shareholders include Goldman Sachs Group Inc. and which handles more than 90 percent of India’s equity derivatives turnover and 75 percent of the cash market, according to data compiled by Bloomberg. Trading in futures and options on the NSE has surged about three-fold in the past five years, even as volumes in the equity market declined.

The NSE’s India VIX Week1 futures expiring March 4 closed at 1,449.25 rupees today. India VIX, which gauges the cost of CNX Nifty options, rose less than 0.1 percent to 13.995.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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