Prop Shops Reduce Activity in NSE Derivatives Market
· Business · Bloomberg, LiveMint
Proprietary trading firms have cut their share of equity derivatives turnover at the National Stock Exchange of India to the lowest level in nearly four years. The pullback at the USD 2 trillion derivatives market comes as traders navigate ongoing issues with the exchange's closing auction mechanism. Prop shops, which use their own capital to execute high-volume trades, have traditionally accounted for a significant portion of daily market volume in Mumbai. Market participants note that regulatory adjustments and operational friction have contributed to the shifting trading patterns. The exchange has not yet announced revisions to address the specific mechanics troubling these high-frequency participants.
Why it matters
A retreat by proprietary traders can reduce overall market liquidity and alter trading dynamics in India's massive equity derivatives segment.
Read the original report — Bloomberg
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