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The National Stock Exchange (NSE) on Thursday, April 18, announced it had received approval from market regulator SEBI for trading in the monthly futures and options (F&O) contracts on the Nifty Next 50 index which will start from Wednesday, April 24.
"...approval received from SEBI, Futures and Options contracts on Nifty Next 50 Index shall be made available for trading in Future & Options segment with effect from April 24, 2024," NSE said on April 18.
As per NSE, the exchange will offer three serial monthly contracts for index futures and index options.
The expiry of the contracts will be the last Friday of the month. If the last Friday is a trading holiday, then the previous trading day will be the expiry day.
The Nifty 50 index represents the top 50 Indian companies, whereas the Nifty Next 50 index consists of 50 companies from the Nifty 100 index, excluding those already included in the Nifty 50.
Earlier in April, NSE announced the introduction of four new indices in both the cash and futures and options segments, commencing April 8.
The NSE put forth a plan to distribute indices such as the Nifty Tata Group 25% Cap, Nifty500 Multicap India Manufacturing 50:30:20, Nifty500 Multicap Infrastructure 50:30:20, and Nifty MidSmall Healthcare through online channels, as outlined in a circular released earlier today.
Meanwhile, on April 16, NSE announced that it would impose an additional exposure margin on some of the F&O stocks. The framework will be effective from April 26, 2024 -- immediately after the expiry of April 2024 contracts.
F&O are a particular kind of trading instrument falling in the category of derivatives. They have gained prominence in stock markets in recent years. In trading, a derivative is a contract that derives its value from an underlying financial asset. Under F&O trading, the investor doesn’t necessarily have to buy the underlying asset but can gain from its price fluctuations in the market.
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