• HDFC securities
• 22 Apr 2024
• Knowledge Centre

SEBI has granted approval to NSE for the introduction of derivatives based on the Nifty Next 50 index (NIFTYNXT50). The launch is scheduled for April 24, 2024.

The National Stock Exchange of India (NSE) will soon unveil a fresh product lineup by introducing derivatives contracts for the Nifty Next 50 index, commencing April 24,2024. This step marks a notable advancement for the Indian stock market, especially catering to traders interested in accessing the burgeoning mid-cap segment and engaging in options trading.

What is Nifty Next 50?

The Nifty Next 50 index, often referred to as the "Junior Nifty," acts as a benchmark for the subsequent 50 largest companies in the Indian stock market following the Nifty 50. Typically, these companies are viewed as being on a path of rapid expansion, embodying the potential future frontrunners of the Indian economy.

 

 Contract Specifications:

 

Particulars	Futures	Options
Instrument Name	NIFTYNXT50	NIFTYNXT50
Tick Size (Price Steps)	Re 0.05	Re 0.05
Contract Size (Lot Size)	10	10
Trading Cycle	3 serial monthly contracts.	3 serial monthly contracts.
Expiry Day	Last “FRIDAY” of the expiry month for the monthly, If the last “FRIDAY” is a trading holiday, then the expiry day is the previous trading day.	Last “FRIDAY” of the expiry month for the monthly, If the last “FRIDAY” is a trading holiday, then the expiry day is the previous trading day.
Quantity Freeze	600	600
Strike Scheme	-	Strike Interval of '100 with strikes 40 —1—40 and Strike Interval of 500 with strikes 20 - 1 - 20 (Including 500 strikes due to strike interval of 100)
Option Type	-	Call European (CE) and Put European (PE)
Settlement	Cash Settled	Cash Settled
Daily Settlement Price	Closing price of the futures contract. If illiquid, then theoretical price will be considered	Closing price of the futures contract. If illiquid, then theoretical price will be considered
Final Settlement Price	Index closing value on the last trading day	Index closing value on the last trading day

 

Nifty Next 50 derivatives

 

The introduction of Nifty Next 50 derivatives provides investors with an expanded array of investment approaches:

 • Hedging: Investors who possess underlying stocks in the Nifty Next 50 can employ futures and options contracts to safeguard against potential price shifts.

 • Leveraged Trading: Derivatives allow investors to assume an augmented stance in the Nifty Next 50, potentially increasing both gains and losses.

 • Income Generation: Options contracts offer opportunities for income generation through methods such as selling covered calls.

 

Market Capitalization of Nifty Next 50

"The market capitalization of index constituents amounted to Rs 70 trillion, constituting approximately 18 percent of the total market capitalization of stocks listed on the NSE as of March 29, 2024. The combined daily average turnover of index constituents was Rs 9,560 crore, representing about 12 percent of the cash market turnover in FY24," stated the NSE.

 

 As of April 18, 2024, the Nifty Next 50 has the following constituents:

 

JIOFIN	INDIGO	SRF	VBL	ZYDUSLIFE
ICICIGI	SIEMENS	PFC	CHOLAFIN	ADANIENSOL
VEDL	BAJAJHLDNG	CANBK	GAIL	LICI
TRENT	IOC	DABUR	BOSCHLTD	ADANIGREEN
BANKBARODA	TATAPOWER	MCDOWELL-N	GODREJCP	TVSMOTOR
MOTHERSON	SBICARD	MARICO	ICICIPRULI	IRCTC
TORNTPHARM	PIDILITIND	NAUKRI	COLPAL	DLF
HAVELLS	RECLTD	DMART	HAL	SHREECEM
PNB	AMBUJACEM	BEL	ATGL	BERGEPAINT
JINDALSTEL	IRFC	ADANIPOWER	ZOMATO	ABB

 *This data can change at any point of time.

 

NSE Circular Link: https://nsearchives.nseindia.com/content/circulars/FAOP61629.pdf