Why is Everyone on Dalal Street Talking About BSE?

The BSE stock is in the news once again, due to significant volatility in its price over the past few trading sessions.

After closing at Rs 2,209.8 on 17 September 2025, the stock has dropped to Rs 2,054 as of 25 September 2025, a decline of over 7% in just 6 trading days. There has also been heavy trading volumes for the shares during this period.

Before delving into the factors behind the stock's movements, here's a brief overview of the company.

About BSE

BSE is the oldest stock exchange in India. It facilitates the trading of equities, mutual funds, commodities, derivatives, and debt instruments. The trading on BSE is conducted electronically using the BOLT (Bombay Online Trading System) platform. The Securities and Exchange Board of India (SEBI) regulates the exchange.

BSE plays a pivotal role in developing India's capital markets, offering investor education, risk management, clearing, and settlement services. It's a vital institution in India's financial ecosystem with a significant impact on the economy and the global market.

Why Investors are Talking About BSE

#1 SEBI Starts Consultation for Removal of Weekly Expiry

SEBI (Securities and Exchange Board of India) has started a consultation process to consider the removal of weekly options expiry in the derivatives market. This move was reported by CNBC Awaaz, and has caused a decline in capital market stocks including BSE.

The rationale behind removing weekly expiry contracts is primarily to protect retail investors, as weekly options often see heavy speculative activity leading to sharp market movements and losses for many retail traders. SEBI aims to reduce speculation and volatility by potentially transitioning to longer-tenure contracts such as monthly expiries.

There are various possibilities under consideration, including fixing expiry days, reducing the number of expiry cycles, or shifting to fortnightly or monthly expiries with defined glide paths. One suggestion that has been floated is to unify the expiry dates across all exchanges, such as NSE, BSE, and others, to simplify and streamline operations.

What Next?

SEBI is expected to collaborate with various stakeholders, including stock exchanges, before releasing the final consultation paper. As of now, no definitive decisions have been made, although the topic of removing weekly expiries has been circulating in the news for a while.

BSE stands to lose significant trading turnover as weekly expiry contracts contribute heavily to its volumes.

For example, if weekly expiries were limited to fortnightly or monthly cycles, some investors estimate that BSE's average daily premium turnover volume could shrink by 26.8% to 80% depending on the scenario modelled.

Different scenarios show that restricting expiries to once a month or having both BSE and NSE expiries on the same day would hit BSE's revenues the hardest.

In fact, BSE has done very well over the years with profits soaring, thanks in no less measure to derivatives volumes. Revenues for FY25 saw a solid 104% growth jumping to Rs 32,120 m from Rs 15,682 m in FY24. The net profits of the exchange soared Rs 13,171 in FY25 from Rs 7,687 in FY24.

The expanding retail investor base has been a critical factor boosting BSE's revenues and profitability by increasing trading volumes, IPO activity, and market participation on the exchange.

Conclusion

The removal of weekly expiry contracts poses a major risk to BSE's derivatives market revenues and overall financials, necessitating proactive measures by BSE to sustain liquidity and market interest in longer-tenure contracts.

To know more, check out the BSE fact sheet and latest quarterly results.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...