Why is trading restricted for Nifty Midcap contracts?

Currently, trading is limited to Nifty Midcap’s current week’s option contract and the current month’s futures contract due to the illiquidity of these contracts. Trading illiquid contracts carries risks, including:

Limited Market Depth:

Illiquid contracts may suffer from limited market depth, making it challenging to enter or exit positions at desired prices.

Bid-Ask Spread:

Illiquid contracts often have wide bid-ask spreads, leading to higher trading costs and potentially lower profits.

Increased Volatility:

Due to limited trading activity, illiquid contracts may experience higher volatility, introducing additional risk to trading strategies.