Derivatives trading boom in India

The Sun

20-06-2025

MUMBAI: Half a dozen global trading giants, from Citadel Securities and IMC Trading to Millennium and Optiver are ratcheting up their presence in India's booming derivatives markets – fuelling a hiring spree and pushing exchanges to improve technology.
The firms' hiring plans, being reported for the first time, come amid expectations that large domestic consumer and investor bases will help shield India from global turmoil sparked by the trade policies of US President Donald Trump.
The South Asian nation made up nearly 60% of global equity derivative trading volumes of 7.3 billion in April, the Futures Industry Association says, while its regulators say notional turnover of the contracts has grown 48 times since March 2018.
For Western firms, the gold rush is too big to ignore, particularly after US trading firm Jane Street earned US$2.34 billion (RM9.9 billion) from its India trading strategy last year, some of the firms' executives said.
'We have seen competition increasing both on the trading front, where you see more players going for the same opportunities, and on the job market as well,' said Jocelyn Dentand of global high-speed trader IMC Trading.
The firm plans to grow its team by more than 50% by the end of 2026 to stand at more than 150, added Dentand, the managing director of its India unit.
Foreign investors turned buyers of Indian stocks in April and May, purchasing a net US$2.8 billion, as they abandoned their previous selling stance from October 2024 to March 2025, prompted by high valuations and slower growth in earnings.
US-based Citadel Securities, a market-making firm founded by well known investor Kenneth Griffin, runs a leaner team of around 10 in India but has ramped up capital allocation to its operations, said a source familiar with its plans.
'In India, we're constantly looking for talent and constantly hiring,' said the source, who sought anonymity in the absence of authorisation to speak to the media and declined to give details of the plan.
Hedge fund Millennium is expanding its India desk via Dubai and Singapore, said a source with direct knowledge of the matter, who also sought anonymity on the same grounds.
Millennium declined to comment for the story. Citadel Securities did not respond to an email seeking comment.
Netherlands-based Optiver, which launched India operations in 2024, plans to grow its team to 100 by the end of 2025, a spokesman said, up from 70 now.
'Optiver is investing ambitiously in India, with a view to expanding to 100 FTEs by year-end and scaling further in the years ahead,' the spokesman added.
Amsterdam-based trading firm Da Vinci and London-based Qube Research and Technologies are also recruiting for quantitative trading roles in India, public postings for jobs show.
Global trading firms are also looking to expand in India by recruiting aggressively from top domestic universities and poaching from home-grown competitors.
They have hired about 300 people in India in the last two years across the trading, technology, compliance, risk, and legal functions, Hong Kong-based recruiter Aquis Search estimates.
'We foresee a good run for the next few years,' said Annpurna Bist, its head of quant and tech.
Intensifying competition has driven up salaries, with even junior traders paid more than double the figure of three years ago, said Bhautik Ambani, head of AlphaGrep Investment Management, one of India's leading quant trading firms.
India's top engineering schools have become the favoured hunting grounds for talent.
'We almost solely hire our traders and software engineers from Indian Institutes of Technology (IITs),' said IMC's Dentand, referring to the country's chain of prestigious engineering schools.
But hiring efforts are now being widened to the universities beyond the IITs, Dentand said.
The influx of global trading firms has opened up opportunities for India's two main exchanges, which are both upgrading their tech infrastructure.
The National Stock Exchange of India (NSE) plans to add 2,000 co-location racks over the next two years while older stalwart the Bombay Stock Exchange (BSE) aims to scale up to 500 by the end of fiscal 2026, from none in March 2024.
Such racks are servers at exchanges that cut trade execution times to microseconds.
'We are a late entrant and need to provide additional value for the unfulfilled demand from high-frequency trading firms and quant firms, amongst others, for co-location racks,' said BSE CEO Sundararaman Ramamurthy.
The exchange has spent between 4.5 billion rupees and 5 billion rupees (RM221 million to RM247 million) on technology in the last two years, he said.
The NSE and regulator the Securities and Exchange Board of India did not respond to queries for the report. – Reuters