In the market, most of the people know about Nifty 50, but along with Nifty Fifty, you also hear the name of Bank Nifty.
Bank Nifty is an index of 12 largest and most trusted banks of India that represents the stocks of the banking sector. Where Bank Nifty is a group of 12 banks listed in NSE.
In this article, we will discuss what is Bank Nifty, which banks are included in Bank Nifty, how to trade in Bank Nifty? You will understand the complete information about Bank Nifty in easy words.
What is Bank Nifty
Bank Nifty is a part of the banking sector, one of the 11 sectors of the Indian stock market. This is an index of India’s most trusted and 12 largest banks.
Nifty Bank was launched in the stock market in the year 2000 by Indian Index Service Product Limited (IISL).
Nifty Nifty is an index of the 12 largest and most trusted banks of India, by looking at which you can find out how high and low the banking sector is today. You can find out by just looking at nifty bank whether there is growth in India’s banking sector today or not.
Most of the people do intraday trading in Bank Nifty and there is maximum movement in the banking sector, that is why people do intraday trading in Bank Nifty.
When there is movement in the prices of stocks, the prices of banks’ shares go up and down very fast in nifty bank and taking advantage of this recession,
Bank Nifty is mostly used for Intraday Trading or Option Trading because very fast movement is seen in this index, hence here traders book very good profit or loss if you do not do risk management. So you can make loss here
Therefore, before trading in such indices, you must know about their strategies. If you do option trading in Bank Nifty, then first you will have to learn option trading well. After learning these points properly, you can start trading in Bank Nifty. can earn good money from
There can be any profit or loss in earning money through trading in Bank Nifty. that is why you should learn the right Trading Strategies first, only then you can earn good money by trading in Bank Nifty.
Which banks are included in bank nifty?
There are many big banks in India, but in Bank Nifty, there are 12 banks with highest market capitalization and volume.
- HDFC Bank
- ICICI Bank
- State Bank Of India
- Kotak Mahindra Bank
- Axis Bank
- IndusInd Bank
- Bank of Baroda
- Punjab National Bank
- IDFC First Bank
- AU Small Finance Bank
- Bandhan Bank
- Federal Bank
These 12 banks have been included in BankNifty and by looking at them we find out how much the banking sector is going up or down today.
These 12 banks come in the list of largest banks of India because to be included in Nifty Bank, banks should have the highest market capitalization.
When and why was Bank Nifty started?
The Government of India wanted to strengthen the position of the Indian Stock Market in the Banking Sector, hence Bank Nifty Index was included in the Indian Stock Market.
In the year 2000, IISL i.e. Indian Service Product Limited had started the Bank Nifty index in the stock market. Through nifty , it became very easy to know whether there is a boom or a recession in the banking sector.
If the trader does intraday trading, then for him this Can prove to be quite profitable. Most trade futures and options in this index.
How to trade in Bank Nifty
You can trade in Bank Nifty in two ways, first is option trading and second is future trading. In both of these, the share price of Bank Nifty has to be predicted in advance.
Mostly Intraday or Swing Trading is done in Nifty Bank.
In which you can buy or sell the banks’ stocks if they go up or down, before the stock market closes on the same day.
Which banks are included in BankNifty
No bank can be included in Bank Nifty. NSE has made some criteria for this. Only when NSE qualifies all the benchmarks in any bank, then it can be included in Bank Nifty and it is not necessary that it passes the criteria. After doing this, that bank stock will definitely be included in Nifty Bank.
- When a banking stock is reviewed then it is important that the bank is a part of Nifty 500.
- Stock belongs to banking sector
- There should be volatility in the company and there should be 90% trading in it in the last 6 months.
- The requirement for this is that the company should be an Indian company.
- It has been at least 6 months or more since the company was listed
- Only those banks which have F&O and future trading can be made a part of the index.
- The branch, head office and complete establishment of the company should be in India only.
- And also Apart from this, what is the rate of banks in Sensex and Nifty and what is its weightage percentage in the market, that is also seen like: The weight percentage of HDFC Bank is 10.6% in the top 50 companies of Nifty and this Bank is at number in Nifty index. Similarly, the weight percentage of ICICI Bank is 5.25% and the weight percentage of Kotak Mahindra Bank is 4.59%.
Only after looking at all these criteria any banks are included in the NSE Bank Nifty index.
How to invest in Bank Nifty
You cannot invest directly in Bank Nifty index, F&O and future trading can be done in it, but if you want to invest in Bank Nifty, then there are some ETFs in which you can invest like BANKBEES, ICICI Prudential Nifty Bank ETF etc.
Similarly, if you want to trade in Index Bank Nifty, then you can buy or sell option or future, this is very risky, hence trading should be done only after knowing the risk management carefully.
What is Lot Size for BankNifty Trading?
To trade in Bank Nifty, you can trade only in lots. The lot size of Bank Nifty is 15. Earlier, the lot size of Bank Nifty used to be 25.
To trade in Nifty , you have to trade the stocks according to the lot size. Have to buy from. For example, there are currently 15 stocks in one lot.
In Banknifty you cannot buy less than 1 lot, that is, if you want to buy stocks then you will have to buy at least 15 stocks. If you want to buy as many shares as you want like other stocks, then you cannot buy them in Bank bank like this.
In BankNifty, lot sizes are same in both Future and Option. Most of the people prefer trading in options as compared to future trading because future trading has high risk because the price movement is very fast in it.
It also has an advantage that if your share increases by 10 points then you get a direct profit of Rs 150 because you have bought 1 Lot i.e. 15 shares.
FAQ – What is Bank Nifty?
The amount of income you can earn from trading depends on a number of factors, such as your investment amount, trading strategy, margin, and market conditions. However, intraday earnings from trading are usually limited and come with risks.
2 types (option Trading and Future Trading)
Trading is required only for a specific period of time, and these are done in the short-medium term using market volatility. While trading you need the ability to make quick decisions, an understanding of technical analysis, and adherence to financial policies.
12 largest banks.
Conclusion of What is Bank Nifty 📈
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