BSE has announced the launch of its new All Derivative Stocks Index, adding another comprehensive benchmark to its growing index portfolio. This development marks a significant step in the exchange's efforts to provide market participants with specialized index solutions.

Index Overview

The newly launched All Derivative Stocks Index is specifically designed to track stocks that are eligible for derivative trading on the exchange. This index will serve as a comprehensive benchmark for securities that can be used in derivative instruments, providing investors and market participants with a focused view of the derivative-eligible segment of the market.

Market Significance

The introduction of this specialized index reflects the growing importance of derivative markets in India's financial ecosystem. By creating a dedicated index for derivative-eligible stocks, BSE is providing market participants with a tool to better understand and track the performance of securities that form the backbone of the derivatives market.

Strategic Development

This launch aligns with BSE's strategy to expand its index offerings and provide investors with diversified benchmarking solutions. The All Derivative Stocks Index will enable market participants to gain insights into the collective performance of stocks that are actively traded in both cash and derivative segments, offering a unique perspective on market dynamics.

BSE Index Services has introduced a new benchmark designed to capture the performance of India's derivative-eligible equity universe. The BSE All Derivative Stocks Index tracks stocks within the BSE 500 that are linked to derivative trading, reflecting the growing depth and liquidity of the country's equity derivatives market.

Index Structure and Methodology

The new index employs a sophisticated weighting methodology that combines multiple factors to ensure balanced representation:

Constituents are selected from the BSE 500 universe based on their derivative trading eligibility, with weights determined through a combination of float-adjusted market capitalisation and momentum scoring. The 10% individual stock weight cap ensures diversification and prevents excessive concentration in any single security.

Market Applications and Investment Use Cases

The BSE All Derivative Stocks Index offers multiple applications for market participants and investors:

• Passive Investment Strategies: Exchange-traded funds (ETFs) and index funds
• Benchmark Services: Portfolio management services (PMS) and mutual fund schemes
• Investment Portfolios: Broader market exposure through derivative-eligible stocks

According to Ashutosh Singh, Managing Director and CEO of BSE Index Services Pvt. Ltd., the index represents a structural shift in benchmark construction. "By dynamically representing the entire derivative-eligible equity universe, the index mirrors the changing depth, liquidity and maturity of India's capital markets," Singh explained.

Strategic Market Positioning

The launch addresses the evolving needs of India's capital markets by providing a transparent, rules-based benchmark that adapts alongside the derivatives ecosystem. The index enables investors to access a broader spectrum of market opportunities while maintaining systematic exposure to stocks with active derivative trading.

BSE Index Services Pvt Ltd, formerly Asia Index Pvt Ltd, manages the calculation, publication, and maintenance of various equity indices. As Asia's oldest stock exchange, BSE continues to innovate in index construction while maintaining its position as home to the benchmark Sensex index, which recently celebrated 40 years since its launch.