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Zerodha Sparks Surge in BSE’s Options Market

BusinessZerodha Sparks Surge in BSE's Options Market

**Zerodha – Fueling BSE’s Derivatives Growth**

As the derivatives market of the Bombay Stock Exchange (BSE) experiences a surge in success, Zerodha, India’s largest stockbroker, emerges as a significant driving force behind this remarkable growth. This collaboration has significantly impacted the market dynamics and intensified trading activities, particularly in the derivatives segment.

**The Rise of BSE in Derivatives Market**

The influence of Zerodha and its affiliated entities has been profound, triggering the exponential growth of BSE’s market share in the derivatives segment. Over the course of several quarters, BSE’s market share escalated from a meager 0.004% to a substantial 15.8%, reflecting the substantial impact of Zerodha’s participation in the exchange.

**Zerodha’s Strategic Stakes**

In a strategic move, Zerodha strategically elevated its equity stakes in BSE, in conjunction with NKSquared and Kamath Associates, further solidifying its presence and influence. With Zerodha acting as a non-promoter non-public shareholder with a notable stake in BSE, this collaboration has significantly bolstered the market positioning of both entities.

**The Kamath Factor**

Nikhil Kamath, the co-founder of Zerodha, and his brother Nithin Kamath have been pivotal in shaping the course of this collaboration. Notably, NKSquared Global, founded by Nikhil Kamath, and Kamath Associates have played a key role in fortifying Zerodha’s market standing, contributing to the substantial surge in BSE’s derivatives market.

**Leveraging Client Participation**

Zerodha’s robust client base has actively contributed to enhancing the liquidity of Sensex options through increased trading participation, amplifying the overall trading momentum in the derivatives segment. This heightened activity has not only benefited Zerodha’s clientele but has also significantly impacted BSE’s market dynamics.

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**Industry Perspectives**

Industry experts emphasize the pivotal role of large brokers, such as Zerodha, in imparting liquidity to exchange products, particularly within segments like F&O. Despite regulatory disclaimers, the substantial clientele of such brokers continues to drive trading activities, amplifying market liquidity and vibrancy.

**Market Expansion Amid New Norms**

The expansion of trading interest at the retail level, particularly post-COVID, has been seamlessly enabled by new-age brokers, transforming the trading landscape and fostering increased market participation. Sundararaman Ramamurthy’s relentless efforts and BSE’s focused approach have considerably positioned the exchange as a key player in the derivatives market.

**Unveiling New Opportunities**

BSE’s strategic launch of a Sensex weekly contract, strategically avoiding clashes with existing options, has proven to be a pivotal move, garnering substantial success in the derivatives domain. Moreover, the active involvement of entities like Zerodha has significantly contributed to the triumph of this innovative contract, solidifying BSE’s position as a remarkable player in the derivatives domain.


The collaboration between Zerodha and BSE symbolizes a transformative shift in the derivatives market, underscoring the pivotal role of key industry players in driving market vibrancy and liquidity. As this partnership continues to redefine market dynamics, it underscores the potential for future growth and innovation within the derivatives segment, setting a compelling precedent for market players and stakeholders alike.

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