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Tuesday, March 8, 2011

NATIONAL STOCK EXCHANGE IN INDIA (NSE)

National Stock Exchange:
The National Stock Exchange of India (NSE) is one of the largest and most advanced stock exchanges in the world. NSE is the largest exchange in Single Stock futures and the seventh largest futures exchange in the world. Its trading facility can be accessed across the country, through over 50000 trading terminals. The central order book with a tight bid-ask spread provides a highly liquid market for the investors.

Nifty 50 futures is the most actively traded contract. The Nifty 50 comprises of companies having leadership position in Indian economy. It consists of highly liquid, 50 largest market capitalized stocks listed on NSE. It is the benchmark of the Indian capital market. Based on the evolving needs of the market and the investors, NSE introduces futures and options trading on Nifty Midcap 50 Index. It is a gateway for investors to invest in the medium capitalised segment of the stock market which is being increasingly perceived as an attractive investment strategy with high growth potential.

Nifty Midcap 50:
Returns on Nifty Midcap 50
April 1, 2004 to 30 Oct 2007 222.52 %(Approx)
April 1, 2007 to 30 Oct 2007 72.84 % ( Approx)

Salient Features:
Comprises 50 stocks that have high growth potential
Benchmark index to capture movements in the medium capitalized segment
Representation from 25 sectors due weight-age to key drivers of Indian economy
All 50 stocks available in Futures & Options trading
Constituents not part of the S&P CNX NIFTY Index
With Base date as January 1, 2008
Base index value -1000

Why one should trade in Nifty Midcap 50 Futures & Options:
Invest: Take a view on companies, which are fast growing, dynamic and highly competitive. They are aggressive companies in their respective industry sectors. Take an exposure to this dynamic pack of companies; invest in the entire basket of such stocks by buying or selling the Nifty Midcap 50 futures and options. The index gives a snapshot of overall performance of midcap companies. This index could also be used to forecast the movements of midcap companies. The trend of expiry of derivative contracts would reflect the market sentiment of a large group of players
Hedge: Reduce risks associated with market exposure to Nifty Midcap 50 stocks by taking a hedged position in the Nifty Midcap 50 derivatives contracts.
Arbitrage: Since, Nifty Midcap 50 index comprises of stocks which are already a part of the derivatives trade it offers a complete arbitrage opportunity between the index and respective stocks futures and options. Investors can also take advantage of the price difference between the Derivatives market and the cash market.

Contract Specifications: Nifty Midcap 50 Futures and Options
Underlying Index : Nifty Midcap 50
Security descriptor : Futures : FUTIDX NFTYMCAP 50
Options : OPTIDX NFTYMCAP50
Price Steps : Rs.0.05.
Lot size : 75
Price Bands : Not applicable
Trading Cycle : Maximum of three months the near month, the next month and the far month. New contract shall be introduced on the next trading day following the expiry of near month contract.
Expiry day : Last Thursday of the expiry month or the previous trading day if the last thursday is a trading holiday.
Settlement basis : Cash settlement.
Style of option : European.

Disclaimer
Market conditions can lead to substantial profit or loss. Investors are advised to seek adequate product and market knowledge as well as proper investment advice before trading. The material provided here is for general information purposes only. While care has been taken to ensure accuracy, the information furnished to reader with no warranty as to accuracy or completeness of its contents and on condition that any changes, omissions or errors shall not be made the basis for any claim, demand or cause for action. The products on Nifty Midcap 50 Index are not sponsored, endorsed, sold or promoted by India Index Services & Products Limited (IISL). IISL makes no representation or warranty regarding the advisability of investing in the products linked to Nifty Midcap 50 Index.

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