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CNX IT is an index comprised of the most liquid and large capitalization IT stocks traded on the NSE engaged in the business of software or hardware. CNX IT index provides investors and market intermediaries with an appropriate benchmark that captures the performance of the IT segment of the market. The index is a market capitalisation weighted index with base date being 1st January 1996 and base index value being 1000. Companies selected in the index have to be IT stocks which should rank high in terms of market value represented by their market capitalization and liquidity.

Who manages the CNX IT Index?

The index is professionally managed by India Index Services and Products Limited (IISL), a joint venture between NSE and CRISIL, which is India's first specialist company dedicated to providing investors in Indian equity markets with Indexes and Index services.

What is the methodology of calculating the CNX IT Index?

Methodology: The CNX IT Index is calculated using the market capitalisation weighted aggregate method. The base date of the index is January 01, 1996 and base index value is 1000.

Selection Criteria

Market Capitalisation: The influence of each company on the index is directly proportional to its market value.

Therefore, a company's rank based on the average market capitalisation over a 6 month period is an important consideration for its selection in the CNX IT Index.

Trading Interest: The companies considered for inclusion must rank among the highest in the IT sector in terms of annual trading turnover and must have demonstrated a high level of trading frequency in the previous 6 month period.

What is the composition of the CNX IT index?

The CNX IT index comprises of the large and liquid securities belonging to the software and hardware sectors. The composition of the index is as follows:-

How will CNX IT Index futures and options benefit investors?

CNX IT index will benefit investors who have a portfolio comprising of IT stocks and wish to hedge their risks against the volatility of the IT sector. It will also help those investors who wish to take a view on the overall movement of the IT sector.

What is the minimum contract size and tick size for CNX IT futures and options contract?

The minimum lot size (multiplier) of the contract will initially be 20 so that the value of the contract is Rs. 2,00,000/- at the time of introduction. The minimum tick size by which the CNX IT index futures & options contract can be bought or sold shall be 0.05 index points i.e. orders can be placed at minimum price intervals of 0.05.

What will be the contract life cycle?

CNX IT index futures & options contracts will have a maximum 3-month expiration cycle. This way, at any point in time, there shall be 3 contracts available for trading in the market i.e. one month, two months and three months duration respectively. All contracts will expire on the last Thursday of the respective months.

How would CNX IT index futures and options be settled?

CNX IT futures and options would be cash settled like Nifty futures and options currently are.

How can I buy or sell the CNX IT index?

The CNX IT index futures and options contracts can be purchased or sold just like any other futures and options contracts through any of the NSE trading members. You may contact your trading member for more details on buying and selling the CNX IT index futures and options contracts.

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