NSE launches Derivatives on the Nifty Next 50 Index today
Mumbai/IBNS: National Stock Exchange of India Ltd (NSE) on Wednesday launched futures and options contracts on the Nifty Next 50 Index.
NSE is the world’s largest derivatives exchange for the fifth consecutive year in a row in the year 2023 based on contracts traded as published by FIA.
The new derivatives contract has received a positive response from market participants, NSE said.
More than 375 trading members from across the country participated in the index derivatives.
The trading members involved in the execution of the initial trade include East India Securities Limited and Samco Securities Limited.
The first day witnessed 1,223 contracts traded worth Rs. 78.16 crores in Futures and 1,724 contracts worth Rs 1.55 crores of premium turnover in Options.
The Nifty Next 50 index provides representation to large capitalisation stocks beyond the Nifty 50 index.
The stocks part of the Nifty Next 50 are the potential contenders for being included in the coveted list of 50 stocks forming part of the Nifty 50 index subject to meeting the parameters specified in the index methodology.
The Financial Services Sector has the highest weightage in the index accounting for 23.76% followed by the Capital Goods sector at 11.91% and the Consumer Services sector at 11.57%.
The Nifty Next 50 index futures and options contracts with its contract symbol “NIFTYNXT50” are available with the trading cycle of 3 serial monthly contracts.
The derivatives are cash-settled with the expiry day being the last Friday of the expiry month.
The exchange has provided a transaction fee waiver on the Nifty Next 50 Index derivatives up to October 2024.
On the occasion, NSE Chief Business Development Officer Sriram Krishnan said “We thank all the trading member fraternity and all stakeholders for their tremendous support in successfully launching the derivatives contracts on Nifty Next 50 index.”
The derivative product is unique considering the underlying index does not have overlapping constituents with the other market capitalisation based broad indices on which derivatives are available on NSE, Krishnan said.
“With increasing interest of participants beyond the top 50 stocks, this index will provide an additional tool for risk management,” he added.
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