Trading in MIDCAPNIFTY

[MohammedFaisal]

@amitb

Please also update on when can we trade in MIDCPNIFTY options specifically on expiry days at least. I am sure if brokers start allowing trade on that, liquidity will pickup. FINNIFTY is a case study for that. Liquidity in itself cannot rise unless ppl are allowed to trade.

There are two issues with allowing Midcap Nifty F&O contracts right now.

1. Low client-wise OI limits- Clientwise OI limit for an F&O contract is 5% of the total open interest. Since the total OI is low, the limit is set is less than 1 lot. We are working with the exchange to have this limit exempted temporarily to allow trading.

The other reason is very low liquidity which @Meher_Smaran has explained in this post.

@Meher_Smaran

Hi @emrys11

We are waiting to pick up slightly to allow it.

@emrys11

how will it get any liquidity?

Usually, volumes start from institutions and prop and later, retail can trade. Moreover, there is a risk of freak trades as well.

It would be great to have an index to hedge our midcap portfolio.