A study on NIFTY 50 Index Monthly Contracts

Abstract

This study aims to analyse risk management strategies employed through spreads in the derivatives market in India, specifically focusing on the NIFTY 50 Index monthly derivative contracts. By examining three primary types of spread strategies—Vertical Spreads, Horizontal Spreads, and Diagonal Spreads—the research seeks to understand how traders and investors manage market risks and optimize returns. Data for the analysis was gathered and assessed using historical prices, option premiums, and market volatility patterns. The findings highlight the effectiveness of various spread techniques in different market conditions, providing critical insights for strategic decision-making in derivative trading.