Page 257 - IMDR JOURNAL 2023-24

IMDR’s Journal of Management Development & Research 2023-24

world, while the National Stock Exchange (NSE) is among the best in terms of sophistication

and advancement of technology. The Indian stock market scene really picked up after the
opening of the economy in the early nineties. The whole of nineties was used to experiment

and fine tune an efficient and effective system. The ‘badla’ system was stopped to control
unnecessary volatility while the derivatives segment started as late as 2000. The corporate

governance rules were gradually put in place which initiated the process of bringing the listed
companies at a uniform level. Over time, the NSE's market capitalization has grown to a

staggering $4.65 trillion. Based on total market value, the NSE ranks as the seventh largest

stock exchange globally. Renamed the ‘Nifty 50’ index, CNX Nifty is a group of 50 equities
that trade on the NSE and span 22 sectors of the Indian economy. It is possible to infer the

general movement of the nation's financial markets from the movement of this benchmark

index. Index futures were introduced by the NSE on June 12, 2000, marking the beginning of
the derivative trading segment. On September 25, 2000, Nifty futures were launched on the

Singapore Exchange (SGX). Later, on July 19, 2010, Nifty futures began trading on the
Osaka Securities Exchange (OSE) as well as the Chicago Mercantile Exchange (CME).”

(Mukherjee, 2007)
“CNX Nifty, rebranded as ‘Nifty 50’ index, is a collection of 50 stocks covering 22 sectors

of the Indian economy trading in NSE. The movement of this benchmark index can be taken

to indicate the overall movement of the country’s capital markets. NSE started trading in the
derivative segment by introduction of index futures on June 12, 2000. Nifty futures were

introduced in the Singapore Exchange (SGX) on September 25, 2000. Later, Nifty futures
also started to trade on Chicago Mercantile Exchange (CME) from July 19, 2010, and the

Osaka Securities Exchange (OSE) from March 24, 2014. Both Nifty spot and futures are
under the regulations of the Securities and Exchange Board of India (SEBI).” (Kotha, 2016).

The NSE, or National Stock Exchange of India Limited, stands among the world’s prominent

th
of stock exchanges, with market capitalization of $4.6 trillion making it the 7 largest
exchange globally.

Derivatives and FNO Segment

Futures contracts are forward contracts (agreeing to pay the future price of the asset) traded
on the exchange in a standard format and regulated by a SEBI (in India). The futures contract

mimics the underlying asset. The contract has a specific lot size and can be bought in
multiple. The futures contracts are time-bound and expire within that time limit. Usually,

future contracts are used as a hedge to the positions taken by the trader.

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