The Banknifty (also known as NIFTY Bank) is one of the leading indexes in the National Stock Exchange of India (NSE). It is also known for its high liquidity in intraday trading.
The Banknifty consists of the top 12 listed Indian banks in NSE. NSE was the first exchange to provide an electronic trading system in India.
Banknifty Characteristics
Launch Date – 15/Sep/2003
Base Date – 01/Jan/2000
Base Value – 1000
Number of Stocks – 12
Methodology – Periodic Capped Free Float
Calculation Frequency – Daily
What are the stocks present in Banknifty?
Banknifty is made up of the top-12 most liquid companies from the banking sector and below is the list of 12 companies that constitute Nifty.
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Stock Selection Criteria in Banknifty
Below is the checklist to pick the stocks for Banknifty:
Companies should be a part of the Nifty-500
It should belong to the banking sector
The trading frequency should be above 90% in the last 6 months.
A minimum listing history of 6 months
It should be eligible for the F&O category
The final 12 companies will be decided based on free-float market capitalization
The weightage of single stock should not exceed more than 33%, and the combined weightage of top-3 stocks should not exceed 62%
Index rebalancing will be done on a semi-annual basis.
Banknifty Live Chart
A live chart is essential to take intraday trades. There are many sources to get a live graph of Banknifty. Tradingview provides a simple and interactive live chart.
Also Read: Options Trading Guide eBook
Banknifty Margin Details
As per NSE's new margin rules, from 1-June-2021, traders should keep 75% of the peak margin available with the broker.
By Sep 2021, the same rate goes to 100%, which means there is no extra leverage for intraday trading in Indian market conditions.
In other words, all brokers should collect a 100% margin from traders. None of the brokers will be able to provide any extra margin to intraday traders.
So, one can check the margin requirements with any broker, as mandated by SEBI. One can check the margin requirements with the below links
Banknifty Lot Size
NSE has reduced the lot size of Nifty F&O to 50 from 75 (effective from July 2021). However, the lot size of Banknifty remained the same at 25.
Other Key Indices of NSE
Nifty Bank
FinNifty
Nifty 100
Nifty IT
Nifty PSU Bank
Nifty Metal
Nifty Energy
Nifty FMCG
Banknifty Intraday Trading Strategy
Below three parameters are essential to get success in any trading style.
Trading System
Risk Management
Trading Psychology
Opening Range Breakout (ORB) trading strategy is best suitable for Banknifty trading.
It gives the best results in bank nifty intraday trading.
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