NSE to launch derivatives on Nifty Next 50 Index (NIFTYNXT50)

NSE to launch derivatives on Nifty Next 50 Index (NIFTYNXT50)
from April 24, 2024
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 represents 50 companies from Nifty 100 after excluding the Nifty 50
companies. As on March 2024, the index had top sector representation from financial services sector
with 23.76% weight followed by capital goods sector with 11.91% and consumer services with
11.57%. The index was introduced on January 1, 1997, with base date and base value being
November 03, 1996, and 1000 respectively. Over the years, the index methodology has undergone
revision. The index computation methodology was revised to Free Float Market Capitalisation
weighted method from May 4, 2009. Subsequently, weight capping was introduced for constituent
stocks on which derivatives were not available. This was revised in 2023 to cumulative weight of nonF&O stocks capped at 10% and non-F&O stocks in the index are individually capped at 4.5% on
quarterly rebalance dates.
The market capitalization of index constituents stands at Rs 70 trillion representing about 18% of
total market capital of the stocks listed on NSE as on March 29, 2024. The aggregate daily average
turnover of index constituents stood at Rs 9,560 crores accounting for around 12% of cash market
turnover in FY24.
The Nifty Next 50 index has a 71% correlation and a Beta value of 0.95 with the Nifty 50 Index. It
has a correlation of 90% with Nifty Midcap 150 index in financial year 2024.
In recent years, Exchange had introduced derivatives on Nifty Midcap Select Index (MIDCPNIFTY) in
January 2022 and derivatives on Nifty Financial Services index (FINNIFTY) in January 2020 in the
equity derivatives segment and multiple products in commodity derivatives segment. The