Bank Nifty Future is a derivative contract traded on National Stock Exchange of India-NSE whose underlying is Bank Nifty Index. Bank nifty or nifty bank is India’s second most followed economic indicator after index Nifty. Bank nifty is a benchmark that captures the performances of Indian Banks in India and is diversified across 12 banking stocks(Both public and private) listed on NSE which is National Stock Exchange. These top 12 banking stocks represent approximately 93.2% of the free float market capitalization of banking sector in India. Means out of all banking stocks listed on National stock exchange, 93% of the banking space is represented only by these 12 bank stocks as on Dec-2016.
Previously the Bank Nifty index had a big weight-age of public sector bank which were later replaced by only performing private sector bank like ICICI, AXIS, HDFC, YES Bank etc. At present out of 12 banks in Bank Nifty only 5 are public sector banks and these captures only 13 % of the total market capitalization. Also out of 12 banks, top 5 banks have 84% weightage out of which only one is PSU bank which is State Bank of India. The Bank Nifty index composition donot remain same always as the stocks which do not perform and lose their market capitalization are replaced by other banks which has more market capitalization than under performers.
Like the Nifty future trading in national stock exchange, Bank nifty future can be traded on NSE. Those who know Bank Nifty Trend is bullish can buy Bank Nifty futures comprising 40 shares. Bears or those who thinks Bank Nifty Trend is in bearish mode, they can short sell bank nifty.First you have to know the trend of bank nifty by Technical Analysis and news which is updated daily on “Bank Nifty Trend” so that you can make a trading strategy, weather to buy “Call or Put Option”. In case of bullish Bank Nifty Trend trader can buy a “Call Option” and in case of bearish trend one can buy a “Put Option”. Here one can find daily Technical analysis, technical trend of bank nifty, support, and resistance of bank nifty and financial news which can affect its trend. Individual banking stocks trend can be known from bank nifty trend as it comprises of banking stocks.
Bank Nifty future contracts have a maximum of 3-month trading cycle- The near month (1), the next month (2) and the far month (3). Anew contract is introduced on the trading day following the expiry of the near month contract. Then the new contract will be introduced for three month duration. In this way, at any point of time there will be 3 contracts available for trading in the market.The price step in respect of BANK NIFTY futures contracts is Rs.0.05.
Same as Nifty future contract, Bank nifty Future contracts expire on the last Thursday of the expiry month. If last Thursday is a trading holiday, the contracts expire on the previous trading day.
Beta of Bank Nifty is more than Nifty, so it is more volatile than Nifty. Most technical trader generally tracks Bank Nifty Trend to monitor the banking stock performance.
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