Let me be honest. Most traders start with the Nifty 50 for a few months. Maybe a year. Then they switch to Bank Nifty because people say it moves more. But Bank Nifty? It’s wild. One bad trade can wipe out what you made in three good ones.
So you’re looking for something else. Something that moves enough to give you real profits but doesn’t swing like crazy. That’s where Midcap Nifty and Finnifty come in.
I’m going to walk you through both of these like I’m explaining to a friend. No fancy words. No marketing talk. Just what you need to know to actually trade them without getting burned.
Let’s break this down simply.
Midcap Nifty (official name: Nifty Midcap Select) is an index made of 25 midcap stocks. NSE doesn’t just pick random companies. They pick based on market cap, how much trading happens, and whether the stock already has F&O available. The biggest stock in it is BSE Ltd with 12.86% weight. Then you have Suzlon Energy, Hero MotoCorp, BHEL, and IndusInd Bank.
Finnifty (official name: Nifty Financial Services) tracks 20 companies in finance. That means banks like HDFC Bank, ICICI Bank, and SBI. NBFCs like Bajaj Finance. Insurance companies like SBI Life Insurance. Housing finance firms.
Think about it like this:
Both let you trade a whole sector without picking individual stocks.
If you mess these up, you’ll lose money. Easy as that.
Detail | Midcap Nifty | Finnifty |
Symbol | MIDCPNIFTY | FINNIFTY |
Stocks in the Index | 25 | 20 |
Lot Size | 120 units | 60 units |
Weekly Expiry | Tuesday | Tuesday |
Monthly Expiry | Last Tuesday | Last Tuesday |
Volatility | Higher than Nifty | Medium to high |
Lot sizes changed in January 2026. Midcap Nifty went from 140 to 120. Finnifty went from 65 to 60. Both expire on Tuesday now, which changed from Thursday back in September 2023.
Here’s the math you need to remember:
If Midcap Nifty is at a ₹50 premium, that’s ₹50 × 120 = ₹6,000 per lot.
If Finnifty is at ₹50 premium, that’s ₹50 × 60 = ₹3,000 per lot.
You’re not buying stocks. You’re buying a contract.
Call option (CE) = you think the index will go up.
Put option (PE) = you think the index will go down
That’s pretty much it for the basics.
You pay a premium. That’s the price of the contract. If you buy, your maximum loss is what you paid. If you sell, you collect the premium, but now you’re the one taking the risk.
This is what you actually do on your trading platform. Alice Blue, Zerodha, Groww, they all work the same way.
Step 1: Get F&O activated
A regular trading account won’t work. You need to apply for F&O. Brokers usually ask for:
Step 2: Find the index
Step 3: Pick your strike
The option chain shows all strikes. If Midcap Nifty is at 12,000:
For your first trade, just stick to ATM or 1 strike OTM. Don’t buy those ₹5-10 premiums. They’re cheap because they’re almost guaranteed to expire worthless.
Step 4: Enter quantity
You enter in lots, not units.
Step 5: Set stop loss BEFORE you buy
Decide this first:
Step 6: Place the order
June 2026. Finnifty is at 25,000. RBI hinted at rate cuts. You think banks will rally.
Your trade:
If you’re right:
Finnifty goes to 25,500 by expiry. Your option is now ₹90.
Profit = (90 – 60) × 60 = ₹1,800
If you’re wrong:
Finnifty drops to 24,800. Stop loss hits at ₹45.
Loss = (60 – 45) × 60 = ₹900
If you hold too long:
Finnifty stays at 25,000. Option expires worthless.
Loss = ₹3,600 (entire premium)
See why stop-loss matters? Without it, you lose 100%. With it, you lose 25%.
Most beginners just buy calls or puts. That’s fine for starting. But these give you better control:
Strategy | Market View | When to Use |
Bull Call Spread | Mildly bullish | Slow rise, low volatility |
Bear Put Spread | Mildly bearish | Slow fall, low volatility |
Iron Condor | Not moving much | Very calm market |
Short Strangle | No big move | Before events, low volatility |
Long Call/Put | Big move coming | High volatility, breakout |
Start with Long Call/Put or Bull Call Spread. They’re simpler and have defined risk.
Don’t touch Short Strangle or Iron Condor until you’ve traded for 6+ months. Selling options needs more margin and serious risk management.
If midcaps are up, you profit. Don’t need to know which stock is driving it.
Finnifty at ₹3,000-₹5,000 per lot vs Nifty 50 at ₹8,000-₹12,000.
Hold banking stocks? Buy Finnifty puts if the sector drops. Don’t sell your long-term holdings.
Sometimes, Midcap Nifty and Finnifty move differently from Nifty 50. Good for diversifying.
Every day, your option loses value if the market doesn’t move. Holding too long kills you.
Midcap trades less than the Nifty 50 or the Bank Nifty. Wider spreads. Harder to exit. Stick to the ATM and 1-2 strikes away.
RBI announces something bad? The whole index drops. Check the news before trading.
5% wrong = 50-100% premium loss. Stop loss is not optional.
Midcaps swing 2-3% in a day fast. Predictions harder than large caps.
What you want | Best index |
Midcap momentum | Midcap Nifty |
Banking/finance news | Finnifty |
Pure bank moves, highest liquidity | Bank Nifty |
Higher volatility | Midcap Nifty |
Most volatile | Bank Nifty |
Lowest capital | Finnifty (60 lot) |
Medium capital | Midcap Nifty (120 lot) |
Lowest volatility | Finnifty |
₹50 premium on Midcap = ₹6,000, not ₹50.
Time decay kills. Exit early if wrong. Don’t wait.
70% loss in minutes happens. Set it before entering.
RBI, budget, earnings = violent moves. Know the exits before the news.
₹5-10 premiums expire worthless most times. Don’t be greedy.
Selling needs ₹100,000+ margin. Not the same as buying.
Alice Blue:
₹20 brokerage per F&O order.
Do not start with real money.
Use:
Trade for 4-6 weeks minimum. Do 10-15 trades. Track win rate and profit/loss.
Only go live if you’re profitable after 6 weeks. Start with 1 lot.
Before paper trading, history test:
Use:
Test 50-100 trades on past data. Different markets: bull, bear, calm.
Why? Shows if your strategy actually works. Helps you adjust before losing real money.
Good for:
Not good for:
Feature | Nifty Midcap Select | S&P 400 MidCap (US) |
Stocks | 25 | 400 |
Focus | Quality midcaps | Broad midcaps |
Options | Yes (NSE) | Yes (CBOE) |
Lot | 120 units | 100 shares |
Expiry | Tue + Monthly | Tue + Monthly |
Volatility | Higher than Nifty | Medium |
Nifty Midcap is more concentrated (25 vs 400). More volatile but easier to predict directionally.
Midcap Nifty and Finnifty give you sector exposure without picking stocks. Finnifty has better liquidity. Midcap has higher volatility and bigger swings.
Remember:
These aren’t easier than the Nifty 50. Just different. Trade with discipline: small positions, defined risk, no emotional holding.
Ready to start? Open your free Demat account with Alice Blue. Get advanced F&O tools with just ₹20 brokerage per order. Open Alice Blue Demat Account Now
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