The National Stock Exchange of India on Thursday said that it will launch monthly futures and options (F&O) contracts on Nifty Next 50, widely known as Junior Nifty, from April 24.

The leading equity derivatives bourse has received approval from the Securities and Exchange Board of India for the launch.

The exchange will offer three serial monthly index futures and index options contract cycles. The cash-settled derivatives contracts will expire on the last Friday of the expiry month.

4 indices for trading

Currently, four indices — Nifty 50 Index, Nifty Bank Index, Nifty Financial Services Index and Nifty Midcap Select Index — are available for trading in the derivative segment, besides 182 securities. “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 per cent weight followed by capital goods sector with 11.91 per cent and consumer services with 11.57 per cent,” it said. The index was launched on January 1, 1997.

The market capitalisation of index constituents stands at ₹70-lakh crore, representing about 18 per cent of the total market capital of the stocks listed on NSE as of March 29, 2024, the release added. The aggregate daily average turnover of index constituents stood at ₹9,560 crore accounting for around 12 per cent of cash market turnover in FY24.

The Nifty Next 50 index has a 71 per cent correlation and a Beta value of 0.95 with the Nifty 50 Index. In financial year 2024, it had a 90 per cent correlation with Nifty Midcap 150 index.

Recently, NSE introduced derivatives contracts on the Nifty Midcap Select Index (January 2022) and the Nifty Financial Services index (January 2020) in the equity derivatives segment.

Sriram Krishnan, Chief Business Development Officer, NSE, said, “The introduction of derivatives on the Nifty Next 50 index (NIFTYNXT50) will well complement the existing index derivatives product suite. The Nifty Next 50 index will represent the space between the Nifty 50 index, comprising the top large and liquid stocks, and the Nifty Midcap Select index, comprising the top large and liquid mid-capitalised stocks.”