Stock market volatility in October pushes Sensex options trading to new highs

High market volatility in October drove Sensex options volumes on the BSE to a record high. NSE index options volumes also rose to a seven-month high amid large market swings.

Market Swings

Sensex options average daily premium turnover hit 35,481 crore rupees in October, up 53% from 23,245 crore rupees in the previous month. Markets turned very volatile due to rising tensions in West Asia that pushed oil prices into triple digits. The Sensex fell 1.6% from 30 September to hit a 52-week low of 71,292.88 on 1 October. Oil prices rose 4% to 102.31 dollars a barrel in the same period. The 30-stock Sensex then swung nearly 5% from its low to a monthly high of 74,849.75 on 19 October. The Nifty swung 4.5% between its 52-week low of 22,179.9 on 8 October and its monthly high of 23,175.25 on 19 October.

Exchange Data

NSE average daily turnover stood at 63,227 crore rupees last month, its highest since March when it was 85,508 crore rupees. The NSE held a 64% market share in index options during October, while the BSE held the rest. Shai Coelho, founder of Vtrender, said higher volatility and weekly settlement days pushed up volumes. Sensex options expire every Thursday and Nifty options settle every Tuesday. Sudhir Joshi, a consultant at Khambatta Securities, noted that traders thrive on volatility. Joshi expects clarity to emerge after the 3 November US midterm polls. Options make up a large part of exchange operating revenues, with NSE options accounting for 60.22% of its operating revenue of 166 billion rupees in FY26.

Context

Stock market derivatives like options allow traders to bet on price movements without owning the underlying shares. High volatility often increases trading activity as investors try to manage risk or profit from rapid price swings.