The SGX Nifty, which traders and investors have used to predict the opening of the Nifty, the indicator for Indian stock markets,  for years before the opening up of the domestic markets, has been renamed, the Gift Nifty.

US dollar-dominated contracts of Nifty futures, which is the index of NSE, will now trade on the NSE IX, located in the Gift City SEZ, instead of the Singapore Exchange. The transition comes after regulatory approvals were obtained from the Monetary Authority of Singapore (MAS) and the International Financial Services Center Authority (IFSCA).

Gift Nifty will be accessible for almost 21 hours, and it overlaps with Asia, Europe, and US trading hours. It is open in two sessions - from 6.30 am to 3.40 pm and then again from 4.35 pm to 2.45 am in the second session. This shall be a boon to the day traders globally, facilitating intraday as well as positional trading in Gift Nifty which would mimic the Nifty, barometer of Indian stock markets.

It may be noted that NSE IX is a subsidiary of the NSE, based in Gift City. The stock exchanges operating in the Gift City are allowed to offer trading in securities in international currencies. So, the futures and other derivative contracts are USD-denominated.  The NSE IX offers US dollar-denominated trading in various products.

Quantsapp helps them with providing that necessary cue of Gift Nifty Futures Live, as to where the Indian markets, especially Nifty 50 is likely to open. The global presence of investors, day traders pertaining to India, makes the availability of Gift Nifty very important. Getting an indicative price most importantly and trading in Nifty is very useful especially in hours when NSE is not open.

There are three types of participants in the derivatives market - hedgers, speculators (also called traders) and arbitrageurs.

They face business risk associated with the prices of underlying assets and use derivatives to reduce their risk to the underlying price volatility. Corporations, investing institutions and banks all use derivative products to hedge or reduce their exposures to market variables such as interest rates, share values, bond prices, currency exchange rates and commodity prices.

Speculators are market participants who possess the view of the underlying asset, either bullish or bearish; hence take a position in derivatives market. Derivatives offer leverage which help traders to earn manifold returns.

Arbitrageurs are market participants who observe a price difference in a product in two different markets and exploit the same. Arbitrage arises when a trader purchases an asset cheaply in one location and simultaneously arranges to sell it at a higher price in another location. Such an opportunity doesn’t last long in the financial system, as many participants would rush in to close the price gap of the different locations.

These participants may be in the form of proprietary desks, foreign institutional investors (FII), Domestic Institutional investors (DII). Foreign Institutional Investors and Domestic Institutional Investors are a strong force in the financial markets to reckon with.

Their activities are monitored by most traders to gauge institutional sentiment or in other words, what smart money is thinking?

FII statistics have been proven pivotal in predicting the institutional sentiment over the years. But the share of retail, high net worth individuals (HNI), and domestic mutual funds (DIIs) have also increased, consistently.

Quantsapp helps in analysing participant data using metrics like Open Interest/Volume of Index futures/options, stock options/futures based on their gross long/short values or net values. A bird’s eye view of FII/DII/Proprietary/Client accounts is an essential think-tool for traders.

Futures trading = Leverage

The word comes from the French word, lever, to lift up.

If you’ve used a lever to move a heavy object, you know the force is amazingly powerful. Investors use leverage to multiply their buying power in the market. As initial margin suggests, in order to buy 1 futures contract, the trader needs to pay only a small percentage of the total value of the contract, one could think of it as, larger exposure to an underlying asset with very small initial margin. This is leverage, gains and losses in such scenarios is manifold.

An illustration: If the initial margin on Nifty Futures is 10%. This implies that if the underlying NSE index returns 10%; due to leverage (as one doesn’t pay the entire amount) in futures contract the percentage returns would be magnified to Nifty returns*100/initial margin, i.e., 100% in this example.

Gift city in India is where Gift Nifty futures trade, they are traded on NSE IX.

Gift Nifty will be accessible for almost 21 hours, and it overlaps with Asia, Europe, and US trading hours. It is open in two sessions - from 6.30 am to 3.40 pm and then again from 4.35 pm to 2.45 am in the second session.

Gift Nifty is the proxy security of NSE Nifty traded on Singapore exchange. The global presence of investors in India makes the availability of Gift Nifty very important. Getting an indicative price most importantly and trading in Nifty is very useful especially in hours when NSE is not open. Gift Nifty is available to track and trade almost for the entire day. It starts at 6:30am IST to 03:40pm IST and then from 4:35pm – 2:45pm. It is crucial to be updated with all the analytics that prepare us well in advance for our trade. One could check out updated prices of Gift Nifty especially in after-market hours on https://web.quantsapp.com/Gift-nifty?symbol=NIFTY in one easy click This round the clock availability gives a good indication of what would be the impact on NSE when it opens. As the index traded in Singapore must have already started discounting the good or bad news in its prices.

Under the Liberalised Remittance Scheme (LRS), Indian retail investors would not be permitted to trade in Gift Nifty. It should be mentioned that under the LRS, the Reserve Bank of India (RBI) prohibits leveraged traders, who include those who trade futures and options, from using more than $250,000 per person annually.

NSE IX (Gift) Nifty is a derivative investment product based on India National Stock Exchange (NSE) Nifty 50. NSE IX members are permitted to solicit and accept orders from U.S. customers for trading in Gift Nifty index contracts. The NSE IX says any trading member – be it Indian or foreign, registered or non-registered – setting up its office through subsidiary/branch model can start trading in the Gift Nifty products by taking membership of NSE IX.

SGX Nifty is the name of the index derivative contracts based on NSE index, namely, Nifty. Earlier in 2000, NSE decided to immediately ink an agreement with folks in Singapore. NSE would supply data regarding Nifty’s prices to the Singapore stock exchange (SGX). In turn, SGX listed an index futures namely SGX Nifty. US dollar-dominated contracts of Nifty futures, which is the index of NSE, will now trade on the NSE IX, located in the Gift City SEZ, instead of the Singapore Exchange. The transition comes after regulatory approvals were obtained from the Monetary Authority of Singapore (MAS) and the International Financial Services Center Authority (IFSCA).

Arbitrageurs are one who establish two offsetting trades to benefit from market pricing inefficiencies. Sometimes the price of a stock in the cash market is lower and sometimes it is higher compared to the similar asset price (for example in futures market). The arbitrageurs exploit such opportunities by buying at one market and selling at the other market place or exchange.

Yes, options on Gift Nifty can be traded with following expiries, on options contract.

Weekly Expiry: Thursday of the week

Monthly Expiry: Last Thursday of the month

Quarterly Expiry: Last Thursday of last month of the quarter