National Stock Exchange of India (NSE), the world’s No 1 derivatives exchange in the year 2023 based on contracts traded, has received approval for Derivatives on Nifty Next 50 index (NIFTYNXT50) from the Securities and Exchange Board of India (SEBI) and will launch these contracts from April 24, 2024. Exchange will offer 3 serial monthly index futures and index options contract cycle. The cash settled derivatives contracts will expire on the last Friday of the expiry month.
The Nifty Next 50 Index, introduced on January 1, 1997, represents 50 companies from Nifty 100, with financial services sector having the highest representation at 23.76%, followed by capital goods at 11.91% and consumer services at 11.57%. The index’s base date and value were November 03, 1996, and 1000 respectively. Shri Sriram Krishnan, Chief Business Development Officer, NSE said “The introduction of derivatives on the Nifty Next 50 index (NIFTYNXT50) will well complement the existing index derivatives product suite”.
The index methodology has undergone revisions over the years, starting with the Free Float Market Capitalisation weighted method in 2009. Weight capping was introduced for constituent stocks without derivatives, and in 2023, the cumulative weight of non-F&O stocks was capped at 10% and individually at 4.5% on quarterly rebalance dates.
