NSE To Launch Monthly F&O Contracts On Nifty Next 50

The National Stock Exchange has introduced futures and options contracts on the Nifty Next 50, which will be effective April 24. The world’s largest derivatives exchange, based on contracts traded, has received approval for derivatives on the Nifty Next 50 from the Securities and Exchange Board of India, the NSE said on Thursday.

The Nifty Next 50 will represent the space between the Nifty 50, comprising top large and liquid stocks and the Nifty Midcap Select, comprising top large and liquid mid-capitalised stocks.

The Nifty Next 50 represents 50 companies from the Nifty 100 after excluding the Nifty 50 companies. As of March, the index had top sector representation from the financial services sector, with 23.76% weightage, followed by the capital goods sector with 11.91% and consumer services with 11.57%.

The market capitalisation of index constituents stands at Rs 70 trillion, representing about 18% of the total market capital of the stocks listed on the NSE  as of March 29.

The aggregate daily average turnover of index constituents stood at Rs 9,560 crore, accounting for around 12% of cash market turnover in FY24.

The bourse will offer three serial monthly index futures and index options contract cycles. The cash-settled derivatives contracts will expire on the last Friday of the expiry month.

This will add to NSE's existing index derivatives product suite after the exchange introduced derivatives on Nifty Midcap Select and Nifty Financial Services in the equity segment and multiple products in the commodity derivatives segment in recent years.

NSE emerged as the world’s largest derivatives exchange in 2023—retaining the position for the fifth consecutive year—in terms of the number of contracts traded, according to the Futures Industry Association. The exchange is ranked third in the world in the equity segment by the number of trades.