The key distinction: contracts vs premium | N18S

The key distinction: contracts vs premium
CAS can cause a much sharper fall in the number of contracts traded than in the total premium turnover.
For example, on BSE on Thursday, if contracts traded fell roughly 50%, but premium turnover fell much less, the reason is simple: the average premium per contract was higher.
That distinction matters because:
Brokerages primarily benefit from trading activity/order flow. Lower number of trades/contracts → lower transaction-linked revenue.
Exchanges derive a significant part of F&O revenue from premium turnover/value traded, so their revenue impact could be much smaller than the fall in contract volumes.
Therefore, the same CAS shock can hurt brokers disproportionately more than exchanges.
The stocks to watch
The obvious listed beneficiaries/losers in this debate would be:

Potentially more vulnerable:
Angel One
Groww
Zerodha (unlisted)

@_anujsinghal #CAS #ClosingAuctionSession

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