NSE waives transaction fees for Nifty Next 50 Index F&O contracts from April 24 to October 31, 2024, boosting participation.
In its circular dated April 23, 2024, the NSE announced that it will not impose transaction charges for Futures and Options contracts on the Nifty Next 50 Index, as previously planned for launch on April 24, 2024.
Encouraging Participation in Nifty Next 50 Futures and Options
“To incentivize participation in Futures and Options contracts on Nifty Next 50 Index, the NSE announced that transaction charges will not be applied to trades in these contracts from April 24, 2024, until October 31, 2024, the launch date.”
The recent statement aims to incentivize involvement in futures and options contracts on the Nifty Next 50 index. NSE stated that no transaction charges will apply to trades in these contracts from April 24, 2024, the launch date, until October 31, 2024.
Previously, NSE outlined that the F&O trading cycle for the Nifty Next 50 index would consist of three consecutive monthly contracts, with the expiry date falling on the last Friday of the expiry month. If Friday coincides with a trading holiday, the expiry day would be the preceding trading day. The quantity freeze is set at 600 contracts.
Nifty Next 50 Index Composition and Evolution
The Nifty Next 50 index comprises 50 companies from the Nifty 100, excluding those in the Nifty 50. As of the end of March, the financial services sector held a weight of 23.76%, followed by the capital goods sector at 11.91%, and consumer services at 11.57%.
The Nifty Next 50 was launched on January 1, 1997, with a base date of November 03, 1996, and a base value of 1000. Over time, there have been revisions to the index methodology, with a shift to the free float market capitalization weighted method on May 4, 2009.
Later, weight capping was implemented for constituent stocks without available derivatives. In 2023, this was adjusted to a cumulative weight cap of 10% for non-F&O stocks and individual caps of 4.5% on quarterly rebalance dates.
In the financial year 2024, the Nifty Next 50 index exhibited a 71% correlation and a Beta value of 0.95 in relation to the Nifty 50 Index, and a 90% correlation with the Nifty Midcap 150 index.
In recent years, NSE launched derivatives on the Nifty Midcap Select index in January 2022, derivatives on the Nifty Financial Services index in January 2020 within the equity derivatives segment, and various products in the commodity derivatives segment.
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