The landscape of trading on the National Stock Exchange (NSE) has undergone a dramatic transformation, with colocation and algorithmic trading reaching record highs, while mobile and direct market access (DMA) trading continue to surge. The latest data highlights a clear shift in investor preferences toward faster, technology-driven execution methods.
Colocation—a system where traders place their servers close to the exchange for ultra-low latency trading—has reached an all-time high of 35.7% in the cash market (CM) segment in 2024, a significant jump from just 3.1% in 2010. This surge has come at the expense of CTCL/Neat terminal-based trading, which has fallen from 86.2% in 2010 to 28.1% in 2024.
Simultaneously, mobile, internet-based trading (IBT), and DMA have seen remarkable growth. Mobile trading now accounts for 20.7% of the total turnover, while IBT and DMA contribute 8% and 6.7%, respectively. The mobile trading segment has been a standout performer, growing at a staggering 66% CAGR over the past decade, underscoring the rising adoption of smartphone-based trading platforms.
For the first time in history, algorithmic trading has overtaken manual (non-algo) trading in the NSE cash market, capturing a record 53% share in 2024, up from 14% in 2010. This surge has been primarily driven by institutional investors and proprietary trading firms, signaling a shift toward automated, data-driven trading strategies. Conversely, non-algorithmic trading has shrunk from 86% in 2010 to 47% in 2024, reflecting the declining dominance of traditional trading methods.
The trend is even more pronounced in the equity derivatives segment, where colocation accounted for 62.1% of turnover in 2024, up from 7.3% in 2010. Colocation’s dominance extends to 49.5% of equity futures turnover and 53.6% of equity options turnover based on premium turnover.
Mobile trading in derivatives has also gained significant traction, making up 17.1% of total turnover, a leap from just 0.7% in 2014. Notably, mobile trading in equity options reached 23.7%, far exceeding its 9.4% share in equity futures, indicating a growing preference for options trading through smartphones.
DMA, while still a smaller player, has shown steady growth, capturing 6.2% of total equity derivatives turnover and 15.7% of equity futures turnover.
The rise of colocation, algorithmic trading, and mobile-based execution highlights the increasing automation and speed-focused nature of modern trading. As institutions and retail investors alike turn to AI-driven strategies and high-speed execution, traditional trading methods continue to fade. With technology driving market evolution, those not adapting to these trends risk being left behind.
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