NSE to launch derivatives on Nifty Midcap Index from January 24

The Securities Exchange Board of India (SEBI) has allowed the National Stock Exchange of India to launch derivatives on the Nifty Midcap Select Index, said a statement from the NSE. The index will launch the index derivatives from January 24, 2022, facilitating traders to bet on the midcap Index.  

As per the NSE, the exchange will offer futures and options with trading cycle of 7 weekly expiration contracts, excluding the monthly expiration contract and 3 serial monthly expiration contracts.  

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The current availability of index derivatives on the exchange is largely focussed on either the large cap stocks or sector specific stocks. The midcap stocks account for around 17% of market capitalisation. The launch of derivatives on Nifty Midcap select index will provide participants an additional hedging tool to manage their portfolio risk effectively," said Vikram Limae, MD & CEO, NSE.  

As per NSE, the midcap segments came into focus during the recent market rally with improved participation levels from across investors class and consequent liquidity. The Nifty Midcap Index has delivered return of 38.73% in the last one year and 19.04% annualized returns in the past five years ending December 2021, said the NSE.  

Nifty Midcap Index aims to track the performance of focussed portfolio of 25 stocks within the Nifty Midcap 150 index. All the index constituents stocks are individually available in derivatives. The weight of the stocks is based on free-float market capitalisation.