Economy

FINNIFTY derivatives surpass trading of 1 crore contracts on a single day

FINNIFTY derivatives (Nifty Financial Services Index derivatives) on NSE witnessed the trading activity of more than one crore contracts today for the first time since its launch. The Exchange launched index derivatives on the Nifty Financial Services Index on January 11, 2021. Today, Exchange witnessed trading of 1.07 crore contracts with a premium turnover of Rs. 869.21 crores in options and 347 contracts worth Rs. 24.77 crores in futures.

FINNIFTY has seen an increase in participation and liquidity post change in the expiry day to ‘Tuesday’ from the ‘Thursday’ expiry from October 2021. The daily average number of contracts traded has increased from 4,553 contracts in October 2021 to 25.12 lakhs contracts in August 2022 to date.

The financial services sector assumes significance as the sector accounts for 30.21% of the Nifty 500 index. The Nifty Financial Services Index comprises 20 stocks and is designed to reflect the behavior and performance of the Indian financial market, which includes banks, financial institutions, housing finance, insurance companies, and other financial services companies.

Recent investment data of Foreign Portfolio Investors (FPIs) indicates that around 30% of new investment flows were channelized into the financial services sector. The sector accounted for 31.9% of the assets under the custody of FPIs. Further, many asset management companies have mutual fund schemes on the financial sector theme.

Exchange offers three monthly futures contracts and options in 7 serial weekly excluding the monthly expiry & 3 serial monthly contracts. The derivatives are cash-settled, with the expiry day being the last Tuesday of the expiry month for the monthly contracts and the Tuesday of the expiring week for weekly expiry contracts. The option contracts are European-styled Call Option (CE) and Put Option (PE).

Earlier this year, Exchange had launched derivatives on another index – The nifty Midcap Select Index. The index tracks the performance of 25 mid-capitalized stocks within the Nifty Midcap 150 index. The MIDCPNIFTY (Derivatives on the Nifty Midcap Select Index) also offers cash-settled weekly & monthly futures and options contracts with ‘Tuesday’ as the expiry day.

About National Stock Exchange of India Limited (NSE):
The National Stock Exchange of India (NSE) is the world’s largest derivatives exchange by trading volume (contracts), as per the statistics maintained by the Futures Industry Association (FIA) for the calendar year 2021. NSE is ranked 4th in the world in cash equities by a number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for the calendar year 2021. NSE was the first Exchange in India to implement electronic or screen-based trading.

It began operations in 1994 and has been ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on SEBI data. NSE has a fully integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions, and financial education offerings. NSE also oversees compliance by trading, clearing members, and listed companies with the rules and regulations of SEBI and the Exchange. NSE is a pioneer in technology and ensures the reliability and performance of its systems through a culture of innovation and investment in technology.

This article was shared with Prittle Prattle News as a Press Release.
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