The launch of Nifty Next 50 derivatives has seen an enthusiastic response from the market. The first monthly expiry, scheduled for May 31, generates significant interest. Open interest is strong, with over 500 members trading and more than ₹1,100 crore turnover within just three weeks of its launch.
The average daily volume for Nifty Next 50 stands at 8,000, with a daily turnover of ₹50-60 crore. A total of 1,30,000 contracts have been traded, and the peak turnover in index futures reached ₹82 crore. This indicates investors' confidence, as 10 lakh contracts are currently open.
The derivatives have been well-received, particularly among those who sought a product beyond the traditional Nifty 50. Nifty Next 50 includes small, mid, and large-cap stocks, and its sector composition is unique, with consumer services and capital goods making up 24% of the index. These sectors are not present in Nifty 50, adding to the index's appeal.
Sriram Krishnan, Chief Business Development Officer of NSE, highlighted the strong interest from institutional investors. The index is already tracked by 7 ETFs and 13 mutual funds, indicating its potential popularity. Futures contracts have garnered more attention than options, with ₹1,077 crore in business for index futures compared to ₹30-35 crore for index options.
NSE is in talks with brokers to make Nifty Next 50 derivatives available to retail investors. Plans to introduce weekly options are also underway, pending SEBI approval. This move aims to broaden market participation and meet the growing demand for diversified investment products.
The Nifty Next 50 derivatives have made a strong debut, reflecting the market's appetite for diversified investment options. With significant trading volumes, strong institutional interest, and plans to engage retail investors, the future looks bright for this innovative product. The index's unique composition and NSE's proactive approach ensure that Nifty Next 50 derivatives will continue to grow in popularity and importance in the Indian stock market.
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