The Bombay Stock Exchange, is set to launch new monthly index option products as part of a broader strategy to expand its derivatives offerings. The move was reported on December 22, 2025, and immediately had a positive impact on investor sentiment, with BSE shares rising over 3% to reach a day’s high of ₹2,769.90.
The monthly index options are designed to complement the existing weekly expiries, which currently dominate trading activity in India. BSE aims to attract traders interested in longer-term strategies and provide a more stable, cost-effective alternative to weekly contracts. By diversifying the types of options available, the exchange hopes to increase overall participation in the derivatives market.
Alongside the new monthly options, BSE is revamping its Bankex index, which tracks the performance of the banking sector. Four banks—Canara Bank, AU Small Finance Bank, Punjab National Bank, and Union Bank—have been added to the index, bringing the total number of constituent stocks to 14. The index’s weighting structure has also been revised to improve balance and make Bankex a more attractive benchmark for investors and traders.
BSE’s management highlighted that the goal is to encourage market participants to shift focus from short-term weekly contracts to monthly options. Sundararaman Ramamurthy, Managing Director and CEO of BSE, stated that monthly contracts tend to be cheaper than weekly options, making them appealing to a wider set of traders. This initiative is part of a deliberate effort to reshape trading behavior, improve product economics, and strengthen the exchange’s derivatives business.
Before this announcement, BSE held a 43.5% market share in notional turnover and 25.9% share in premium within the futures and options (F&O) segment. The exchange competes directly with the National Stock Exchange (NSE), especially in index derivatives. By expanding its product portfolio with monthly contracts and a revised Bankex index, BSE aims to increase market share and offer more competitive trading solutions.
The share price reaction demonstrates investor confidence in the potential revenue and strategic benefits of these initiatives. BSE has been a strong performer this year, with shares up approximately 53% prior to the announcement. Investors interpreted the news as a credible signal of future growth opportunities, particularly in the derivatives segment.
The revamp of the Bankex index is expected to enhance liquidity and make it a stronger benchmark for the banking sector, attracting more trader interest. Coupled with the launch of monthly options, this strategy positions BSE to capture a larger slice of the derivatives market, expand participation, and offer innovative products to market participants.
In summary, BSE’s plan to introduce monthly index options and overhaul the Bankex index reflects a proactive approach to strengthening its derivatives business. These steps aim to attract long-term traders, diversify product offerings, and increase market competitiveness. The strong stock market response underscores optimism about BSE’s strategic direction and potential to expand its influence in India’s derivatives segment.