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VWAP Return: Derivative Settlement Price Shift Expected
14 Sep
Summary
- VWAP-based derivative settlement price may return by October/November 2026.
- BSE expected to underperform despite potential CAS issue resolution.
- Groww poised for significant profit growth due to derivative trading.
A return to VWAP-based derivative settlement prices is projected for October or November 2026, according to brokerage insights. This change, coupled with restrictions on certain limit orders, is expected to curb volatility on expiry days. Market participants anticipate a resolution to CAS-related issues, evidenced by forecasts of increased average daily derivative turnover in H2FY27.
However, BSE's growth prospects appear limited due to a plateau in the options industry and the exchange's capped market share. Further headwinds for BSE include anticipated negative impacts on premium turnover from tighter RBI bank guarantee norms and a potential management transition in June 2027.
In contrast, Groww is positioned for substantial gains if CAS issues are resolved, given that derivative trading constitutes about 55% of its revenue. The brokerage forecasts Groww's net profit to grow at a 30% CAGR from FY26 to FY29, bolstered by broking business expansion, new ventures like MTF and wealth management, margin improvements, and the planned addition of US stocks.
