Sensex options volumes soar to record highs as oil boils

Heightened market volatility in October drove Sensex options volumes on BSE to a record high, as choppy markets attracted greater trading interest. NSE index options volumes also rose to a seven-month high amid sizeable market swings, exchange data showed.

Sensex options' average daily premium turnover (ADPT) stood at a record ₹35,481 crore in October, up 53% from ₹23,245 crore in the preceding month. Markets turned excessively volatile amid escalating tensions in West Asia, which pushed oil prices into triple digits.

Oil on the boil

Reacting to rising oil prices amid heightened tensions in West Asia, the Sensex plunged 1.6% from 30 September to hit a 52-week low of 71,292.88 on 1 October, according to BSE data. Oil prices rose 4% over the same period to $102.31 a barrel, according to online financial portal Investing.com.

The 30-stock Sensex then gyrated nearly 5% from its 52-week low to a monthly high of 74,849.75 on 19 October. The heightened volatility drove Sensex options volumes to a record.

Meanwhile, 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.

The NSE's ADT stood at ₹63,227 crore last month, its highest since March 2026, when it was ₹85,508 crore. The NSE had a 64% market share in index options during October, with BSE accounting for the rest.

Volatility advantage

"The relatively higher volatility pushed up Sensex volumes to a record high and Nifty to multi-month highs, with the boost also coming on weekly settlement days, when index option volumes tend to be higher," said Shai Coelho, founder of stock analysis firm Vtrender.

Sensex options expire every Thursday while Nifty options settle every Tuesday. The options expire a day earlier if the settlement day falls on a holiday.

The Nifty, at Friday's close of 23,053.10, traded 12.6% below its 52-week high of 26,373.2 in early January this year. The Sensex, at Friday's close of 74,459.53, was 13.6% below its 52-week high of 86,159.02 on 1 December last year.

Sudhir Joshi, consultant at Khambatta Securities, said traders "thrive" on volatility, pointing to the record-high ADT in Sensex options last month.

He expects greater clarity on market direction to emerge after the 3 November US midterm polls. Joshi said a defeat in the Congress could weaken President Trump's ability to pursue policies on tariffs and immigration, as well as continue the stand-off with Iran.

"If Trump is held back by the Congress post the polls, EMs like India could benefit, but if he escalates in West Asia, markets could see a one-way movement down, instead of a roller coaster ride like in October," Joshi added.

Revenue engine

Options contribute a bulk of exchanges' operating revenues. While BSE had not provided a break-up of options' contribution to transaction charges in its first-quarter earnings presentation for FY27, NSE, which listed in September this year, revealed that its options business accounted for 60.22% of its operating revenue of ₹166 billion in FY26.

The BSE share closed 0.24% higher on Friday. The NSE settled two-fifths of a per cent lower at ₹1,782.1 apiece.