Nifty Next 50 Index:
The National Stock Exchange (NSE) has announced the introduction of derivative contracts on the Nifty Next 50 index, set to commence from 24th April 2024.
- The Nifty Next 50 Index represents 50 companies from Nifty 100, excluding the Nifty 50 companies.
- NSE has received approval from the Securities and Exchange Board of India (SEBI) for these derivative contracts.
- The exchange will provide three serial monthly index futures and index options contract cycles.
- Contracts will be cash-settled and expire on the last Friday of the expiry month.
- Derivatives in the market refer to financial contracts between two or more parties and derive their value from an underlying asset or benchmark.
- There are two main types of derivatives:
- Futures, which involve a binding agreement to buy or sell the underlying security on a future date.
- Options, which give the holder the right (but not the obligation) to buy or sell the underlying asset at a predetermined price within a specified period.
- The NSE is one of the two main stock exchanges in India, with the other being the Bombay Stock Exchange (BSE).
- It was the first exchange in India to provide modern, fully automated electronic trading.
- NSE emerged as the world’s largest derivatives exchange in 2023, in terms of the number of contracts traded, according to the Futures Industry Association (FIA).
