NSE releases F&O Contracts on the Nifty Midcap Select Index

With effect from January 24, 2022, the National Stock Exchange of India Limited (NSE) has introduced Futures & Options on the Nifty Midcap Select Index, which will be available for trade in the Futures & Options. The Nifty Mid-Cap Select Index evaluates the performance of a 25-stock portfolio inside the Nifty Mid-Cap 150-index. Surprisingly, the Nifty Mid-Cap Select Index has a high beta of 1.10 compared to the diversified index but only a 0.76 correlation with the Nifty-50 index.

The futures and options contracts for MIDCPNIFTY, the trading symbol for the Nifty Mid-Cap Select index, are highlighted below-

– The lot size for F&O trading in the MIDCPNIFTY will be 75 units per lot, with a tick size of Rs.0.05.

– On the MIDCPNIFTY, the futures and options contracts will include seven weekly serial contracts and three-monthly serial contracts, for a total of ten contracts. Instead of Thursday, these contracts will expire on Tuesday.

– On the MIDCPNIFTY, both futures and options transactions will be cash paid, and there will be no delivery against settlement of either futures or options contracts.

– All alternatives on the MIDCPNIFTY will be European options (calls and puts), meaning they can only be exercised on the end date and not before.

The Nifty Mid-Cap 100 index has risen from 6500 in 2012 to 31,000 today, representing a CAGR of almost 17%. Midcap stocks account for roughly 17% of the market capitalization. The exchange’s currently available index derivatives primarily focus on large-cap stocks or sector specialized stocks. The introduction of the Nifty Midcap Select Index will give investors and traders an additional hedging tool to manage portfolio risk effectively.

Following are the top constituents that are represented by their weightage-

Nearly 30% of the index’s weightage is accounted for by Tata Power, SRF, Zee, Voltas, and Bharat Electronics. The following are the top stocks in the Nifty Midcap Select Index.

COMPANY NAMEWEIGHTAGE
Tata Power Company Ltd.7.52
SRF Ltd.7.07
Zee Entertainment Enterprises Ltd.5.95
Voltas Ltd.5.68
Bharat Electronics Ltd.5.04
Shriram Transport Finance Company Ltd.4.90
Trent Ltd.4.79
Page Industries Ltd.4.71
AU Small Finance Bank Ltd.4.58
Godrej Properties Ltd.4.39

Following is the Sector representation:

The Financial Services sector has the most weight, followed by Automobile, Manufacturing, Power, and Chemicals, which make up roughly 53% of the index’s weight.

SECTORWEIGHTAGE
Financial Services26.63
Automobile13.21
Industrial Manufacturing8.63
Power7.52
Chemicals7.07
Media & Entertainment5.95
Consumer Goods5.68
Oil & Gas5.46
Consumer Services4.79
Textiles4.71
Construction4.39
Services3.39
Cement & Cement Industries2.57

The Nifty Mid-Cap Select Index has a price to earnings ratio of 26.8. This valuation ratio gauges the current share price about earnings per share (EPS). The price-to-book value (P/B) ratio, which is the ratio of a company’s market value (share price) to its book value of equity, is 3.21. The dividend yield is now 0.94.

NSE releases F&O Contracts on the Nifty Midcap Select Index
Open your Trading and Demat Account Today

Start your trading and investment-related journey today with GCL and open your trading and Demat account today! To get started, log into GCL On-Time App and choose the Stock ‘MIDCPNIFTY’ in the drop-down menu, then pick Nifty Mid-cap Index from the list to add it to your watchlist.

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