F&O Trading in Nifty Next 50 Starts From Today

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F&O Trading in Nifty Next 50 Starts From Today

The National Stock Exchange of India (NSE) is all set to launch derivatives contracts for the Nifty Next 50 index, starting 24 April 2024 (today). This move follows approval from the Securities and Exchange Board of India (SEBI), marking a significant development in the Indian derivatives market landscape.

The new derivatives offerings will include three serial monthly index futures and index options contracts, all settled in cash, with expiry scheduled on the last Friday of each expiry month. These contracts will be based on the Nifty Next 50 index Select Index, offering investors exposure to a diverse range of companies beyond the Nifty 50 .

The introduction of derivatives linked to the Nifty Next 50 index serves to complement the existing suite of index derivatives, bridging the gap between the Nifty 50 index and the Nifty Midcap Select Index. Comprising 50 companies from the Nifty 100, excluding those in the Nifty 50, the Nifty Next 50 Index, also known as the Junior Nifty, offers a balanced representation of mid-cap stocks.

As of March 2024, the index is predominantly composed of companies from the financial services, capital goods, and consumer services sectors. Launched on 1 January 1997, with a base value of 1000, the Nifty Next 50 Index has witnessed substantial growth, with index constituents collectively reaching a market capitalization of INR 70 lakh crore as of 29 March 2024.

With the introduction of derivatives for the Nifty Next 50 index, investors can now access new avenues for portfolio diversification and risk management strategies in the Indian derivatives market.

For derivative traders, they should start trading in this index right off the bat. Liquidity is a major criterion that needs to be checked for the first few weeks in order to determine whether the market depth is deep enough to handle your trading size.

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X (formerly, Twitter) - Aayush Khanna

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