NSE Launches Derivatives Trading For Nifty Next 50 Index Today

Trading of derivatives on the Nifty Next 50 Index (NIFTYNXT50) starts today on the NSE.

SEBI has given the green light for these derivatives on the Nifty Next 50 Index at NSE.

The Nifty Next 50 index includes 50 companies from the Nifty 100, excluding those in the Nifty 50.

Derivative contracts are short-term financial tools with a set expiration date. They are based on various assets like stocks, commodities, currencies, indices, exchange rates, or interest rates.

In the financial year 2024, the Nifty Next 50 index demonstrates a robust 71% correlation and a Beta value of 0.95 when compared to the Nifty 50 Index. Additionally, it showcases a notable correlation of 90% with the Nifty Midcap 150 index.

Over recent years, the National Stock Exchange has expanded its derivatives market offerings.

In January 2022, NSE introduced derivatives trading on the Nifty Midcap Select Index (MIDCPNIFTY). Similarly, in January 2020, derivatives were launched on the Nifty Financial Services index (FINNIFTY) within the equity derivatives segment.

Moreover, NSE has diversified its product portfolio by introducing multiple offerings in the commodity derivatives segment.

Earlier on 23 April, NSE unveil a White Paper detailing insights into these index derivatives

NSE in it’s circular said that the cash-settled derivatives contracts will reach their expiration on the last Friday of the expiry month.

Meanwhile, NSE announced that there will be no transaction charges for trading in F&O contracts on the Nifty Next 50 index.

This waiver will be effective from 24 April 2024, until 31 October 2024, spanning six months.

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