NSE has introduced F&O contracts including weekly options on Nifty Financial Services index - FINNIFTY that covers the top banking, insurance, housing finance, NBFC and other financial services companies. Trading in these contracts will start from Monday 11th, 2021.
The symbol for the Nifty Financial Services (FINNFITY) contracts and the index on Kite is FINNIFTY.
For all of us trading Banknifty F&O, this index offers an exciting mix extending to the whole BFSI sector and not just banks.
Index constituents
| Company | Industry | Weight% |
|---|---|---|
| HDFC Bank | Banks | 27.13 |
| HDFC | Housing Finance | 17.51 |
| ICICI | Banks | 14.14 |
| Kotak | Banks | 12.1 |
| Axis | Banks | 6.46 |
| Bajaj Finance | NBFC | 5.64 |
| SBI | Banks | 4.06 |
| Bajaj Finserv | Insurance | 2.29 |
| HDFC Insurance | Insurance | 2.21 |
| SBI Life Insurance | Insurance | 1.43 |
| ICICI Lombard General Insurance | Insurance | 1.37 |
| Shriram Transport Finance | NBFC | 0.87 |
| ICICI Prudential Life Insurance | Insurance | 0.74 |
| Piramal | Other Financial Services | 0.68 |
| Bajaj Holdings & Investments | NBFC | 0.66 |
| Cholamandalam Investment & Finance | NBFC | 0.66 |
| HDFC AMC | Other Financial Services | 0.59 |
| Power Finance Corporation | Financia Institution | 0.54 |
| REC | Financia Institution | 0.49 |
| Mahindra and Mahindra Financial Service | NBFC | 0.44 |
Sectoral representation
| Nifty Financial Services | Nifty 50 | Nifty 500 | Nifty Bank | |
|---|---|---|---|---|
| Banks | 63.1 | 26.5 | 20.3 | 100 |
| Housing Finance Companies | 18.5 | 7.5 | 5.6 | 0 |
| NBFCs | 8.1 | 2.3 | 3 | 0 |
| Insurance Companies | 8 | 2.5 | 2.5 | 0 |
| Other Financial Services | 1.3 | 0 | 1.4 | 0 |
| Financal Institutions | 1.1 | 0 | 0.3 | 0 |
| Total Financial Services Exposure | 100 | 38.7 | 33.2 | 0 |
Nifty Financial Services is a far more diversified index than Bank Nifty.
Risk and return measure comparison of the indices.
| CAGR returns | Annualised Volatility | Return-Risk Ratio | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Period | Financial | Nifty | Nifty | Nifty | Financial | Nifty | Nifty | Nifty | Financial | Nifty | Nifty | Nifty |
| Services | 50 | Bank | 500 | Services | 50 | Bank | 500 | Services | 50 | Bank | 500 | |
| Since Inception | 18.7% | 13.9% | 16.9% | 13.9% | 29.3% | 22.9% | 30.5% | 22.2% | 0.64 | 0.61 | 0.56 | 0.63 |
| 15 years | 16.9% | 12.6% | 14.9% | 12.1% | 29.3% | 22.9% | 30.2% | 22.1% | 0.58 | 0.55 | 0.49 | 0.55 |
| 10 years | 13.3% | 9.9% | 11.1% | 10.0% | 23.6% | 17.5% | 24.9% | 17.0% | 0.57 | 0.56 | 0.45 | 0.59 |
| 7 years | 19.0% | 13.4% | 16.3% | 14.2% | 22.8% | 17.2% | 24.0% | 17.0% | 0.83 | 0.78 | 0.68 | 0.84 |
| 5 years | 17.3% | 13.3% | 13.7% | 12.6% | 23.7% | 18.2% | 24.8% | 17.7% | 0.73 | 0.73 | 0.55 | 0.71 |
| 3 years | 13.6% | 11.2% | 7.3% | 7.8% | 27.8% | 21.1% | 28.9% | 20.3% | 0.49 | 0.53 | 0.25 | 0.38 |
| 1 years | 4.1% | 15.7% | -2.6% | 17.4% | 41.2% | 31.3% | 43.1% | 29.5% | 0.10 | 0.50 | -0.06 | 0.59 |
| 6 months | 43.5% | 36.0% | 46.6% | 36.1% | 24.0% | 15.5% | 27.5% | 15.0% | 1.81 | 2.32 | 1.69 | 2.40 |
| 3 months | 42.3% | 24.2% | 46.0% | 23.0% | 24.2% | 14.4% | 27.1% | 13.8% | 1.75 | 1.67 | 1.70 | 1.67 |
Nifty Financial Services beta and correlations with Nifty 50 Index, Nifty Bank and Nifty 500 Index.
| Beta relative to Nifty Bank | Correlation with Nifty | |||||||
|---|---|---|---|---|---|---|---|---|
| Services | Nifty 50 | Nifty Bank | Nifty 500 | Services | Nifty 50 | Nifty Bank | Nifty 500 | |
| Since Inception | 0.94 | 0.66 | 1 | 0.64 | 0.98 | 0.88 | 1 | 0.88 |
| 15 years | 0.95 | 0.66 | 1 | 0.64 | 0.98 | 0.88 | 1 | 0.88 |
| 10 years | 0.92 | 0.63 | 1 | 0.61 | 0.97 | 0.89 | 1 | 0.89 |
| 7 years | 0.92 | 0.64 | 1 | 0.63 | 0.97 | 0.89 | 1 | 0.88 |
| 5 years | 0.93 | 0.66 | 1 | 0.64 | 0.97 | 0.9 | 1 | 0.89 |
| 3 years | 0.93 | 0.66 | 1 | 0.63 | 0.97 | 0.91 | 1 | 0.9 |
| 1 year | 0.94 | 0.67 | 1 | 0.62 | 0.98 | 0.92 | 1 | 0.91 |
| 6 months | 0.84 | 0.47 | 1 | 0.44 | 0.97 | 0.84 | 1 | 0.81 |
| 3 months | 0.86 | 0.45 | 1 | 0.4 | 0.96 | 0.84 | 1 | 0.79 |
Contract specifications
| Particulars | Futures | Options |
|---|---|---|
| Symbol | FINNIFTY | FINNIFTY |
| Instrument | FUTIDX | OPTIDX |
| Tick Size (Price Steps) | Re 0.05 | Re 0.05 |
| Contract Size (Lot Size) | 40 | 40 |
| Trading Cycle | 7 serial weekly excluding the monthly expiry and 3 serial monthly Contracts. | |
| Expiry Day | Last Thursday of the expiry month for the monthly contracts and Thursday of the expiring week for weekly expiry contracts excluding the expiry week of monthly contract. If the Thursday is a trading holiday, then the expiry day is the previous trading day. | |
| Strike Scheme | - | 30-1-30 |
| Strike Interval | - | 100 |
| Option Type | - | Call European (CE) and Put European (PE) |
| Settlement | Cash Settled | Cash Settled |
| Daily Settlement Price | Last half hour VWAP of futures. In the absence of trading in the last half an hour, the theoretical price would be considered. | - |
| Final Settlement Price | Index closing value on the last trading day | Index closing value on the last trading day |
| Quantity Freeze | 5001 | 5001 |
| Price Band | Operating range of 10% of the base price | A contract specific price range based on its delta value is computed and updated on a daily basis |
| Spread Contracts | M1 M2 M1 M3 M2 M3 W1 W2 W1 W3 W1 W4 W2 W3 W2 W4 W2 W5 W3 W4 W3 W5 W3 W6 | - |
Check out these whitepapers by NSE for more on the index and the derivative contracts on it:
- Nifty Financial Services Index (FINNIFTY)
- Derivatives on the Nifty Financial Services (FINNIFTY) Index
You can start tracking the Nifty Financial Services index on Kite by adding it to the market watch. The index symbol is FINNIFTY.
Do check out this conversation Abid had with Alok Dharia on what this index means to you as traders
