NSE F&O contract on Nifty Financial Services index sees 1.4 lakh volume on Day 11 min read . Updated: 11 Jan 2021, 07:10 PM IST
- The financial services space assumes significance, as the sector accounts for 33.5 per cent of the Nifty 500 Index
The National Stock Exchange (NSE) tod launched derivatives on the Nifty Financial Services Index, which will give more flexibility to institutional as well as retail investors to manage their hedge.
The first day witnessed volumes of 1.4 lakh contracts being traded worth Rs. 511 crores and open interest of 28,219 contracts at the end of the day.
311 trading members across the country participated in the index derivatives. The trading members involved in the execution of the first trades are East India Securities Ltd., Marwadi Shares & Finance Limited and Zerodha Broking Limited. The near week futures contract last traded price was at a premium of 37 basis points to the closing Nifty Financial Services index value while the near monthly futures contract last traded price was at a premium of 49 basis points to the Nifty Financial Services closing index value.
On the occasion, Mr. Vikram Limaye, MD & CEO, NSE said “Financial services is an important sector in India’s economy. The Nifty Financial Services Index reflects the behaviour and performance of the Indian financial services sector which includes banks, financial institutions, housing finance, insurance companies and other financial services companies. This is the first-time NSE has introduced weekly futures for the stock index derivatives. The index derivatives will provide a new risk management tool to investors with exposure to the financial services sector."
The Nifty Financial Services index has a 94% correlation and a Beta value of 1.2 with the Nifty 50 Index. The Nifty Financial Services index has delivered annualized returns of 16.59% in last 5 years.
The Nifty Financial Services index futures and options contracts with its contract symbol “FINNIFTY" are available with trading cycle of 7 serial weekly excluding the monthly expiry and 3 serial monthly contracts. The derivatives are cash settled with expiry day being the last Thursday of the expiry month for the monthly contracts and Thursday of the expiring week for weekly expiry contracts. The option contracts are European styled Call Option (CE) and Put Option (PE) with strike scheme of 30-1-30 and strike interval of 100.
Exchange has provided a transaction fee waiver on the Nifty Financial Services Index derivatives up to June 30, 2021.