Bank Nifty Meaning: The Indian stock market presents many opportunities for traders and investors to make good money. You need to possess the right knowledge and information to take advantage of the opportunities. Many believe that in the Indian stock market you can trade only in shares, but this is not true. In fact, it is not known to many that you can even trade in indices as well. In this article, we will learn about one of the most important Sectoral Indices nifty meaning, nifty bank meaning & which is part of the Nifty Index i.e. Nifty Bank in detail and its related concept.
Firstly. Let us learn about the Nifty Index.
Meaning of Nifty Indices
Nifty Index represents the value of shares of a particular group or sector. As the value of the stock changes, the value of the index changes too. The Nifty Index represents the major sectors of the economy and their performances can be measured by looking at the price changes in the stock price.
Sectoral Index is a part of the Nifty Index. Let us learn the meaning of Sectoral Indices
Meaning of Sectoral Indices
Sectoral Indices represents that value of stocks of a single sector. Similar kind of stocks is chosen of a particular sector and grouped together. The index moves on the basis of the performance of the stocks representing a sector. The various Sectoral Indices that are traded in the stock exchange are as follows:
- Nifty Auto Index
- Nifty Bank Index
- Nifty Financial Services Index
- Nifty FMCG Index
- Nifty IT Index
- Nifty Media Index
- Nifty Pharma Index
- Nifty Private Bank Index
- Nifty PSU Bank Index
- Nifty Reality Index
- Nifty 500 Industry Indices Index
Now we shall learn in detail about the Nifty Bank Index.
What is Nifty Bank Index?
Nifty Bank Index comprises of the most traded and large-cap Indian banking stocks. These banking stocks act as a benchmark that represents the capital market performance of Indian banks. The Nifty Bank comprises of 12 banks from the banking sector which is actively traded on the National Stock Exchange.
Let us have a look at the list of 12 banks that form part of Bank Nifty Index.
Stocks Part of Bank Nifty Index:
|Axis Bank Ltd.||FINANCIAL SERVICES|
|Bank of Baroda||FINANCIAL SERVICES|
|Federal Bank Ltd.||FINANCIAL SERVICES|
|HDFC Bank Ltd.||FINANCIAL SERVICES|
|ICICI Bank Ltd.||FINANCIAL SERVICES|
|IDFC First Bank Ltd.||FINANCIAL SERVICES|
|IndusInd Bank Ltd.||FINANCIAL SERVICES|
|Kotak Mahindra Bank Ltd.||FINANCIAL SERVICES|
|Punjab National Bank||FINANCIAL SERVICES|
|RBL Bank Ltd.||FINANCIAL SERVICES|
|State Bank of India||FINANCIAL SERVICES|
|Yes Bank Ltd.||FINANCIAL SERVICES|
Let us now learn about how trading in done in Bank Nifty
How Trading is done in Bank Nifty
The Bank Nifty comprise of the above 12 stocks. On the basis of the movement of these banking stocks, the price of the Bank Nifty Index moves up and down. One can trade in Nifty Bank through the futures and options segment. In the futures segment, the trader can purchase Bank Nifty lot and sell them at a higher price to make a profit. Similarly, if the trader expects the price of Bank Nifty Index to fall, he can sell the Bank Nifty lot in the futures market and purchase it again at lower levels when the price falls.
Similar, to the futures market, is the options market. Here the trade in Bank Nifty is done through call option and put option. To trade in the options market, the trader must have the right knowledge as it is not that simple as the future market. The options market is a little complicated and requires solid understanding before any trade is done here.
The most common question that arises in the head of the traders in Nifty Bank is the risk involved. Let us now know how safe it is to trade in Nifty Bank.
Is it Safe to Trade in Bank Nifty?
The stock market is subject to volatility. If you know how to play the volatility well you can make good returns out of it. Same goes with bank nifty, it is more volatile than the Nifty which makes it a very good bet for the intraday traders. If you know how to read the technical charts well and know how to play the news flowing in the market, you can very well make good money by trading in the bank nifty. All you need to do is put a strict stop loss while trading in the bank nifty.
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