national The Stock Exchange (NSE) has started derivative contracts on Nifty Next 50 Index from Wednesday. It has received good support from market participants. NSE said in a statement that more than 375 trading members from across the country participated in this index derivative. On the first day, 1,223 contracts worth Rs 78.16 crore were recorded in the futures segment and 1,724 contracts in the options segment with a premium turnover of Rs 1.55 crore.
What is Nifty Next 50?
Early trading members include East India Securities Limited and SAMCO Securities Limited. The Nifty Next 50 index represents the 50 largest companies following the NSE’s benchmark index Nifty 50. The companies included in this index are considered potential contenders for inclusion in the Nifty 50 list. Sriram Krishnan, Chief Business Development Officer, NSE, said, “The derivative products are unique in that the underlying index does not have any overlapping component with other market capitalization-based broad indices. The index will provide an additional tool for risk management.” ” Nifty Next 50 Index Futures and Options contracts are available with a trading cycle of three consecutive monthly contracts.
Expiry is on the last Friday of the month
Derivatives are cash settled and these contracts expire on the last Friday of the month. At present, NSE has waived transaction fees on Nifty Next 50 derivatives till October 2024. In market language, derivatives represent financial contracts between two or more parties and their value is derived from the underlying asset or index.
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