With an aim to enhance its derivatives trading offerings, National Stock Exchange of India (NSE) has launched derivatives contracts for Nifty Next 50 index. This development comes on the heels of NSE's recent introduction of several new derivatives contracts, showcasing the exchange's commitment to innovation and market expansion.
The Nifty Next 50 index, which ranks the top 50 stocks by float market capitalization after the Nifty 50, serves as a key indicator for potential future inclusions in the prestigious Nifty 50. These stocks, categorized as midcap companies, are selected based on their free float market capitalization, offering investors exposure to a diverse range of mid-cap companies with promising growth prospects.
Open Demat Account and Start Trading!
After securing necessary approvals from the Securities and Exchange Board of India (SEBI), NSE will offer trading in Futures and Options (F&O) on the Nifty Next 50 index from April 24, 2024.
In the initial phase, Nifty Next 50 contracts will have a monthly expiry and the F&O contracts on Nifty Next 50 will expire on the last Friday of the month. In case the last Friday of the month is a trading holiday, the Nifty Next 50 contracts will expire on the previous trading day. The lot size for Nifty Next 50 contract will be 10 units and will represent a position size of Rs. 6.25 Lakhs approximately.
In the recent past, the performance of the Nifty Next 50 index has been robust, delivering a return of 5.23% in the last month and 13.96% in the last three months. On a yearly basis, the index has outperformed the Nifty, generating a return of 58.43% compared to Nifty's 23.85%. Over a longer horizon of 10 years, the Nifty Next 50 has generated an alpha of 127% over the Nifty. Among the best-performing stocks in the Nifty Next 50 basket in the last six months are Trent (up by 97%), HAL (up by 88%), Adani Green Energy (up by 85.8%), Indian Oil (up by 81.6%), and IRFC (up by 79.9%), showcasing the potential for significant returns within this index.
A an index - the Nifty Next 50 index, introduced on January 1, 1997, has emerged as a significant benchmark of the Indian stock market. As of March 2024, the index has a predominant sectoral representation from the financial services sector, accounting for 23.76% of the index weight, followed by the capital goods sector (11.91%), consumer services (11.57%), FMCG (10.62%), and Oil and Gas (6.50%). Among the top constituents of the Nifty Next 50 index as of March 2024 are Trent Ltd. (4.80%), Bharat Electronics Ltd (3.98%), Tata Power (3.68%), Hindustan Aeronautics Ltd (3.43%), and Indian Oil (3.39%). These companies collectively represent a market capitalization of ₹70 trillion, constituting 18% of the total NSE stock market capitalization.
The introduction of derivatives trading on the Nifty Next 50 index is expected to further enhance market liquidity and increase market participation by offering traders with additional avenues to manage their risk and a new instrument to trade in, thereby reinforcing NSE's position as a leading stock exchange in India.
Financial Calculators: SWP Calculator | EMI Calculator | SIP Calculator | Compound Interest Calculator | CAGR Calculator | Sukanya Samriddhi Yojana Calculator | Retirement Calculator | Mutual Fund Returns Calculator | EPF Calculator
Popular Stocks: ICICI Bank Share Price | HDFC Bank Share Price | CDSL Share Price | UPL Share Price | TCS Share Price | BHEL Share Price | Trident Share Price | IRFC Share Price | Adani Power Share Price