Midcap Nifty futures on Zerodha

Midcap Nifty futures are futures contracts on the Nifty Midcap Select index, listed on the National Stock Exchange (NSE) and traded in India through brokers including Zerodha . The underlying is a focused index of 25 liquid midcap stocks, maintained by NSE Indices Limited and drawn from the broader Nifty Midcap 150. One contract is a lot of 120 units from the January 2026 cycle, settles in cash against the index close, and expires on the last Tuesday of its month under the schedule SEBI set from September 2025.

This article sets out the index composition, the futures lot size and how the November 2024 framework fixed it, the Tuesday expiry, cash settlement, and the discontinuation of Nifty Midcap Select weekly options from November 2024. The discontinuation is frequently misread as the end of midcap index derivatives. It removed the weekly options only; futures and monthly options continue. This article states the position precisely and links to the F&O segment on Zerodha and the margin and risk articles a trader should read before taking a midcap futures position, which carries higher volatility than a large-cap index.

What Nifty Midcap Select tracks

Nifty Midcap Select is a focused index of 25 stocks chosen from the Nifty Midcap 150 index and maintained by NSE Indices Limited. The 25 constituents are selected on market capitalisation, average daily turnover and availability for trading in NSE’s futures and options segment, so the index is built specifically to be tradable as a derivative rather than to represent the whole midcap universe.

The index launched with a base date of 3 October 2005 and a base value of 1,000. It is computed on a free-float market-capitalisation weighted basis, with stock weights set by free-float market value, and reconstituted half-yearly in March and September. A new eligible stock is included when its six-month average free-float market capitalisation is at least 1.5 times that of the smallest existing constituent, which keeps the index tilted toward the larger, more liquid midcaps. Because midcap stocks move more sharply than large caps, the index, and therefore the futures, carries higher volatility than the Nifty 50 or FinNifty .

Futures contract specifications

The contract specification fixes the lot, the settlement basis and the expiry.

The lot is 120 units from the January 2026 cycle, revised down from 140. NSE fixes the lot so the contract value sits in the Rs 15 lakh to Rs 20 lakh band that the October 2024 index-derivatives framework requires, measured against the index level over the review period. The method is identical to the one applied to Nifty 50 futures : the lot is chosen so one contract reaches the Rs 15 lakh floor, in multiples of 5, not less than 10. Because Nifty Midcap Select trades at a lower index level than Nifty 50, it needs a larger lot to reach the same contract value, which is why 120 units rather than 65.

Expiry and the September 2025 change

Midcap Nifty futures expire on the last Tuesday of the expiry month. SEBI standardised NSE derivatives expiries to Tuesday from 1 September 2025, moving them off the historical Thursday and assigning BSE contracts Thursday so the exchanges no longer cluster expiries. If the last Tuesday is a trading holiday, expiry shifts to the previous trading day.

Before November 2024 the index carried its own weekly options expiry, which made it a short-dated weekly trading product. That weekly cycle ended with the discontinuation of weekly options; the monthly futures and options now follow the standard last-Tuesday expiry. The mechanics of the calendar are set out in how the options expiry calendar works .

Cash settlement

Midcap Nifty futures are cash settled against the closing value of the Nifty Midcap Select index on expiry day, computed by NSE Indices Limited. No shares change hands. The settlement converts the difference between the trader’s entry and the index close into a cash credit or debit, scaled by the lot size.

Cash settlement applies to all index derivatives. There is no delivery obligation on a midcap futures position, which distinguishes it from single-stock futures, where an open position into expiry creates a share-delivery obligation, detailed in physical settlement of stock F&O .

The November 2024 weekly-options discontinuation

The change midcap traders most need to register is the discontinuation of Nifty Midcap Select weekly options from November 2024, part of the SEBI index-derivatives framework that followed evidence of heavy retail losses in the segment.

SEBI limited weekly index options to one benchmark per exchange. NSE retained Nifty 50 weekly options and discontinued the weekly options on Nifty Midcap Select, FinNifty and Bank Nifty. The aim was to cut the speculative churn that overlapping weekly expiries produced across multiple indices.

The discontinuation applied to weekly options only. Nifty Midcap Select futures continued without interruption, and monthly options continued as well. A trader can still take a directional or hedged midcap position through the monthly options and the futures; what is gone is the short-dated weekly options contract. The end of the midcap weekly options sits alongside the Bank Nifty weekly expiry phaseout and the equivalent change for FinNifty futures , which followed the same rule.

Margin and the higher volatility of midcaps

Holding one Midcap Nifty futures lot requires SPAN margin plus exposure margin , as with any index futures contract. The total runs to a low double-digit percentage of the contract value, shown live by the Zerodha margin calculator before order placement.

The point specific to midcaps is volatility. Midcap stocks move more than large caps, so the Nifty Midcap Select index has a higher historical volatility than the Nifty 50. SPAN, which is computed from the worst-case one-day loss across price and volatility scenarios, therefore demands a larger margin per rupee of contract value for the midcap contract than for the large-cap one, and that margin rises faster during turbulent periods. Gap risk is also larger: a midcap index can gap further on adverse news than a large-cap index. A trader holding Midcap Nifty futures should read the risks of F&O trading on Zerodha with the higher volatility in mind. Intraday traders use the MIS product code ; positional traders use NRML .

Liquidity relative to large-cap index futures

Nifty Midcap Select futures are less liquid than Nifty 50 futures , which carry the heaviest volume on NSE. The near-month midcap contract holds the bulk of the open interest; the next-month and far-month trade thinner. Lower liquidity shows up as wider bid-ask spreads and greater price impact from a large order, both costs a trader pays on entry and exit.

The thinner book matters most near expiry and during stress, exactly when a midcap trader most wants to exit. A position that cannot be closed quickly at a fair price compounds the volatility and gap risks the index already carries. A trader should read the spread and depth in the Kite order window before placing an order, use a limit order on the thinner months, and account for the wider next-month spread when rolling a position. The combination of higher volatility and lower liquidity makes the midcap contract a sharper instrument than the large-cap index futures, suited to a trader who has weighed both.

Midcap futures versus a midcap index fund

For a reader whose aim is long-term exposure to midcaps, the futures are the wrong tool. A midcap index fund or the Nifty Midcap 150 index fund gives broad midcap exposure without leverage, without a margin requirement, without monthly expiry and rollover, and without the liquidity and gap risks the futures carry. The futures suit a short-term leveraged or hedged position by a trader who has weighed the volatility and the thin book; the index fund suits an investor holding midcaps for years. Note that the Nifty Midcap Select index, the futures underlying, is a focused 25-stock subset, whereas a Nifty Midcap 150 fund spreads across the wider midcap universe, so the two are not the same exposure even before the question of leverage.

See also

• F&O segment on Zerodha
• Nifty 50
• Nifty Midcap 150 index fund
• National Stock Exchange
• Nifty futures contract specifications
• FinNifty futures on Zerodha
• Nifty Next 50 futures on Zerodha
• Stock futures lot size on NSE
• Weekly expiry contraction, November 2024
• Bank Nifty weekly expiry phaseout
• How the options expiry calendar works
• Weekly versus monthly expiry
• SPAN margin on Zerodha
• Exposure margin on Zerodha
• Zerodha margin calculator
• NRML product code
• MIS product code
• Physical settlement of stock F&O
• Risks of F&O trading on Zerodha
• How to rollover an F&O position on Zerodha
• Open interest
• India VIX
• SEBI F&O entry-barrier rules 2024
• Nifty 50 ETF

External references

• NSE Indices: Nifty Midcap Select index
• NSE: Equity derivatives contract specifications
• SEBI: Measures to strengthen the index derivatives framework
• Z-Connect: SEBI’s new rules for index derivatives
• Zerodha margin calculator

References

1. NSE Indices Limited, Nifty Midcap Select index methodology and factsheet (base date 3 October 2005, base value 1,000).
2. NSE, Equity derivatives contract specifications, Nifty Midcap Select futures.
3. SEBI, measures to strengthen the index derivatives framework, circular dated 1 October 2024 (one weekly options benchmark per exchange).
4. NSE circular discontinuing weekly derivatives on Nifty Midcap Select, FinNifty and Bank Nifty, effective November 2024.
5. SEBI, final settlement day standardised to Tuesday for NSE derivatives, effective 1 September 2025.