In recent times, Bank Nifty has been gaining maximum traction among traders keen to trade on banking stocks. Bank Nifty trading is the most actively traded index under the F&O prospect of NSE. In the trading industry, traders have different options to trade, including stocks, options, commodities, etc. For those who want to trade on NSE, bank nifty trading is a popular index and is widely traded.
Bank and Nifty are famous indices among the most liquid. They represent the performance of the top 12 and top 50 organizations. Futures and options (F&O) contracts on both indexes enable traders to make predictions about their price fluctuations.
There are many options in bank nifty that a trader can choose. However, to get the best return out of this trade, you need to have a proper understanding and strategies to trade accurately. Having a useful insight about the Bank’s Nifty components will serve you well with the right path of trading.
We at Best Stock Advisory offer complete bank Nifty trading tips for beginners who are new to this and want to earn big for prospects.
What is Bank Nifty?
Bank nifty is a part of the stock market that tracks the banking sector. The National Stock Exchange (NSE) founded Bank Nifty in September 2003 to permit unrestricted movement of the capital market performance of banking, which is one of the most significant service sectors in India. It consists of highly liquid and market-capitalized stocks. Bank Nifty investing includes stocks from both the public and private banking sectors.
The Bank Nifty Index uses January 2000 as a base year to trade. Each Bank Nifty stock is assigned a weight based on the free-float market capitalization method. No single stock in this index has a weightage greater than 34%. For beginners, bank Nifty investing can be tricky, having less knowledge about the trading process. Therefore, it is important to follow the right bank Nifty trading strategies using the right advisory platform.
Bank Nifty Forecast for Next 30 Days – 🢃 🢃
| Date | Weekday | Min | Max | Value |
|---|---|---|---|---|
| 19.02-2024 | Monday | 42809 | 50255 | 46532 |
| 20.02-2024 | Tuesday | 43191 | 50703 | 46947 |
| 21.02-2024 | Wednesday | 43788 | 51404 | 47596 |
| 22.02-2024 | Thursday | 43066 | 50556 | 46811 |
| 23.02-2024 | Friday | 43661 | 51255 | 47458 |
| 26.02-2024 | Monday | 42893 | 50353 | 46623 |
| 27.02-2024 | Tuesday | 43013 | 50493 | 46753 |
| 28.02-2024 | Wednesday | 42887 | 50345 | 46616 |
| 29.02-2024 | Thursday | 42751 | 50187 | 46469 |
| 01.03-2024 | Friday | 42550 | 49950 | 46250 |
| 04.03-2024 | Monday | 42728 | 50158 | 46443 |
| 05.03-2024 | Tuesday | 43320 | 50854 | 47087 |
| 06.03-2024 | Wednesday | 43249 | 50771 | 47010 |
| 07.03-2024 | Thursday | 43805 | 51423 | 47614 |
| 08.03-2024 | Friday | 43805 | 51423 | 47614 |
| 11.03-2024 | Monday | 43595 | 51177 | 47386 |
| 12.03-2024 | Tuesday | 43660 | 51254 | 47457 |
| 13.03-2024 | Wednesday | 42671 | 50093 | 46382 |
| 14.03-2024 | Thursday | 43004 | 50484 | 46744 |
| 15.03-2024 | Friday | 42993 | 50469 | 46731 |
| 18.03-2024 | Monday | 42665 | 50085 | 46375 |
| 19.03-2024 | Tuesday | 40838 | 47940 | 44389 |
| 20.03-2024 | Wednesday | 40809 | 47907 | 44358 |
| 21.03-2024 | Thursday | 41193 | 48357 | 44775 |
Bank Nifty Top Gainers (NSE) over 1-Week – 🢃 🢃
| Company Name | CMP | Prev Close | Change |
|---|---|---|---|
| IndusInd Bank Ltd. | ₹ 1,491.75 | ₹ 1,476.95 | 1.00 % ( ₹ 14.8) |
| The Federal Bank Ltd. | ₹ 164.3 | ₹ 156.6 | 4.92 % ( ₹ 7.7) |
| ICICI Bank Ltd. | ₹ 1,022.95 | ₹ 1,016.65 | 0.62 % ( ₹ 6.3) |
| HDFC Bank Ltd. | ₹ 1,417.8 | ₹ 1,414.05 | 0.27 % ( ₹ 3.75) |
| Bandhan Bank Ltd. | ₹ 201 | ₹ 197.35 | 1.85 % ( ₹ 3.65) |
| Punjab National Bank | ₹ 130.3 | ₹ 128.85 | 1.13 % ( ₹ 1.45) |
| IDFC First Bank Ltd. | ₹ 82.7 | ₹ 81.25 | 1.78 % ( ₹ 1.45) |
| AU Small Finance Bank Ltd. | ₹ 582 | ₹ 581.9 | 0.02 % ( ₹ 0.1) |
Bank Nifty Top Losers (NSE) over 1-Week – 🢃 🢃
| Company Name | CMP | Prev Close | Change |
|---|---|---|---|
| Bank Of Baroda | ₹ 275.4 | ₹ 275.7 | -0.11 % (₹ 0.3) |
| Axis Bank Ltd. | ₹ 1,068 | ₹ 1,072.2 | -0.39 % (₹ 4.2) |
| Kotak Mahindra Bank Ltd. | ₹ 1,735 | ₹ 1,739.25 | -0.24 % (₹ 4.25) |
| State Bank Of India | ₹ 757.2 | ₹ 761.7 | -0.59 % (₹ 4.5) |
Top Sectors Covering Bank Nifty
There are different banks traded under the Nifty in NSE. Some of these are-
- HDFC Bank Limited
- ICICI Bank Limited
- Axis Bank Limited
- State Bank of India
- Kotak Mahindra Bank Limited
- IndusInd Bank Limited
- Bank of Baroda Limited
- AU Small Finance Bank Limited
- Federal Bank Limited
These public and private sector banks are chosen according to their market capitalization and liquidity. Using a weighted methodology, this index serves as a reliable benchmark, providing a thorough picture of the capital market performance of the banking sector. In addition, this index serves as a point of reference for the development of index funds, exchange-traded funds, and other structured financial products.
How does Bank Nifty Work?
Before we learn about bank Nifty trading tips, it is important to know how they work. Bank Nifty works or calculates through the free-float market capitalization method. Under this, the weight of every bank stock is determined through market capitalization but with the consideration of free-float shares.
Formula used for Bank Nifty trading is-
Market Capitalization = Equity Capital * Share Price
Free float market capitalization = Share Price * Equity Capital * Investable Weight Factor (IWF)
Index Value = Current Market Value / (1000 * Base Market Capital)
The base value of Bank Nifty is 1000, and the index is calculated using this base value as a reference point.
Determining Weightage
Another way to know how bank nifty works is to determine the weightage. In the index, stocks with higher market capitalization get weight. This indicates that the movement of the Bank Nifty is more significantly influenced by the performance of stocks that have a higher weightage. Below is the list of banks having weightage-
| Banks | Weightage |
|---|---|
| HDFC | 32.06% |
| ICICI Bank | 17.43% |
| Kotak Mahindra | 15.75% |
| Axis Bank | 10.23% |
What are the Top Bank Nifty Trading Strategies for Beginners?
For a beginner, Below mentioned are top bank NIFTY trading strategies to apply for beginners-
Long Call or Long Put Strategy
The long call strategy involves purchases of Bank Nifty call options. Purchasing the call option enables a trader to profit from Bank Nifty’s potential growth without taking on the significant risk of buying the index itself. Long Put Strategy allows traders to benefit from future downward swings in Bank Nifty if they anticipate a bearish market.
Straddle Strategy
One of the most important bank Nifty trading tips is using this straddle approach, traders can profit from substantial market movements in either direction by simultaneously purchasing a call option or a put option.
Breakout Strategy
The breakout strategy involves finding support on the Bank Nifty chart. Traders watch the movement of the price around these levels, waiting for a breakout. A significant volume breach above or below a resistance level in the price signals a possible change in market mood and offers a trading opportunity.
Nifty Bank Company
Below is the list of top NIFTY banks with the highest market cap and market price. This is to make your bank’s Nifty trading easy.
| S.r | COMPANY | MARKET CAP | MARKET PRICE | SECTOR |
|---|---|---|---|---|
| 1 | HDFC Bank | ₹10,73,822 Cr | ₹1,412.25 (-0.13%) | Banks |
| 2 | ICICI Bank | ₹7,13,780 Cr | ₹1,020.80 (+0.41%) | Banks |
| 3 | State Bank of India | ₹6,79,698 Cr | ₹768.65 (+0.91%) | Banks |
| 4 | Kotak Mahindra Bank | ₹3,45,921 Cr | ₹1,736.25 (-0.17%) | Banks |
| 5 | Axis Bank | ₹3,30,884 Cr | ₹1,066.90 (-0.49%) | Banks |
| 6 | Bank of Baroda | ₹1,42,497 Cr | ₹279.80 (+1.49%) | Banks |
| 7 | Punjab National Bank | ₹1,41,822 Cr | ₹131.60 (+2.13%) | Banks |
| 8 | IndusInd Bank | ₹1,14,940 Cr | ₹1,499.15 (+1.50%) | Banks |
| 9 | IDFC First Bank | ₹57,414 Cr | ₹83.35 (+2.58%) | Banks |
| 10 | AU Small Finance Bank | ₹38,903 Cr | ₹582.75 (+0.15%) | Banks |
| 11 | Federal Bank | ₹38,120 Cr | ₹165.20 (+5.49%) | Banks |
| 12 | Bandhan Bank | ₹31,791 Cr | ₹200.95 (+1.82%) | Banks |
Conclusion
Since its debut, Bank Nifty has gained a lot of popularity among traders, drawing in both novices and experienced players. Nonetheless, doing a proper study about the market and Bank Nifty is important to trade smoothly. Moreover, building a profitable trading portfolio requires taking into consideration the risk associated with derivative trading on the Bank Nifty. Check out the Best Stock Advisory to follow these proven Bank Nifty recommendations along with tips that would serve you with the best return.
FAQs
Q: 1) What does the Bank Nifty Represent?
Ans: Nifty Bank represents 12 of the most liquid and large capitalized stocks from banks to trade in National Stock Exchange.
Q: 2) Is Bank Nifty Trading Profitable?
Ans: A script that appeals to investors hoping to turn a profit quickly is Bank NIFTY. Nonetheless, investments become riskier due to their volatility. Trading Bank NIFTY options offer a plethora of alternatives.
Q: 3) What is the ideal time to invest in Bank Nifty?
Ans: It is a part of intraday trading and should be done within the first couple of the share market opening. Usually, the market opens at 9.15 am, you can start trading within 15 minutes and finish it before 2 pm.
Q: 4) How long can I hold the bank Nifty shares?
Ans: One can hold Nifty bank shares for 3 months of the trading cycle.
Q: 5) What is a bank nifty for beginners?
Ans: Bank Nifty is a dedicated index made up of 12 liquid large-cap banking stocks, reflecting the performance of the banking sector within India. Nifty is a stock market index that represents the overall market performance of 50 major Indian companies across various sectors. Beginners must learn about the market and follow certain tips to trade smoothly.
6) How much money do I need to trade in Bank Nifty?
Ans: If you are keen to trade in Bank Nifty, you should have approximately R 2lac. However, bear in mind that the majority of people who start option buying lose money. If you wish to start, you can do it with as little as Rs 5-10k.