How is Bank Nifty effective in summarizing economic health?


Bank Nifty is defined as an index, which comprises of large capitalized and liquid bank stocks. It usually offers investors with a standard to capture the capital market performance. Bank Nifty contains twelve leading banks, including both the Public sector and Private sectors that are usually listed on NSE.

Bank Nifty options are considered to be the highest traded index showing a positive correlation.

How is the weightage of the bank nifty decided?

The weightage of Bank Nifty is entirely based on the free-float market capitalization of banks. The free-float capitalization is related to the market value of the total number of shares. It is considered to be a powerful method to review banks’ weightage in Bank Nifty Index. The share price gets impacted by specific things like corporate policies, innovation, products, bank-specific news, and others that, in-turn influences the weightage.

How do you find the trend of bank Nifty?

Recently, the nifty trend is tough to catch. But the future contract comes with a fixed expiry date that can be moved to the next contract. These contracts work as derivative instruments used for deriving the value using the Bank Nifty Index.

Bank Nifty Weekly options offer secure trading for buyers

Talking about the weekly options, they have inevitably widened the scope when it comes to trading opportunities for a Bank Nifty trader. As of now, the trader can be listed in a weekly option contract by repaying fewer premiums as compared to the time when entering monthly contracts. Previously, the buyers went through lots of troubles because of the presence of a big-time gap between expiry of the contracts. Thus weekly options are known to be a better opportunity.

Don’t forget about the role of SEBI in Bank Nifty

The Securities and Exchange Board of India (SEBI) is defined as a statutory regulatory body presented by the Government of India in 1992. It was introduced to regulate the securities market established in India and further protects the interests of investors.

It is powerful enough to control and perform functions like checking the book accounts related to stock exchanges, approve by-laws of stock exchanges, inspecting the financial books, and others. In short, SEBI was introduced with the purpose of monitoring unfair and malpractices to protect the investors.

Hence, it is advisable to spend on Bank Nifty if you have complete knowledge about it.