How is Bank Nifty Future Calculated?

How is Bank Nifty Future Calculated?

Step by step Calculate Bank Nifty Future

Bank Nifty Future is a derivative contract traded on National Stock Exchange of India. A Bank Nifty future derives its value from the Bank Nifty index which in turn is dependent upon the movement of top banking stocks in the index.

Bank Nifty represents the 12 most liquid and large capitalised stocks from the banking sector which are traded at National Stock Exchange (NSE).  The lot size of Bank Nifty traded in NSE is now 20.

Bank Nifty also is called as a Index of banking sector stocks is an economic indicator of a Country.  The 12 banks which are included in the Bank Nifty Index are

HDFC Bank, ICICI Bank, Kotak Bank, Axis Bank, State Bank of India, IndusInd Bank Ltd, Federal Bank Ltd.   RBL Bank Ltd, Bank of Baroda & Yes Bank Ltd.

Bank weightage in Bank Nifty Index as on 10 Oct 2019. 

HDFC Bank Ltd.

31.45

ICICI Bank Ltd.

18.83

Kotak Mahindra Bank Ltd.

14.78

Axis Bank Ltd.

12.35

State Bank of India

9.29

IndusInd Bank Ltd.

7.45

Federal Bank Ltd.

1.61

RBL Bank Ltd.

1.23

Bank of Baroda

0.99

Yes Bank Ltd.

0.77

Bank Nifty provides investors and market intermediaries a benchmark that captures the capital market performance of Indian banking sector.  

Since Bank Nifty includes 12 major banks of India registered on National Stock Exchange (NSE), and changes in the price trend of these banks, either uptrend or down trend affect the pricing of the Bank Nifty Index.  Bank Nifty has a higher beta ie. It is very volatile than Nifty futures contract.  It can go up or down by 200-300 points in matter of minutes.

As per above bank nifty future is calculated on the basis of the performance of the overall banking sector in India. If bank are performing well, giving better results, RBI is monitoring well, also the government is helping them in distress and banking shares will do well. If majority of the bank do well, bank nifty future will tend to move at higher levels.

If there is any issue with the banking sector like  losses in Rural Branches, Large over dues, NPA, Competition from Non-Banking Financial Institution, Competition with Foreign Banks this do impact our banking sector. Any major impact of this on the major bank and bring down the share prices of the banks.  Any down trend in the bank could affect negatively and bank nifty future could come down a lot.

We give best share tips in Bank Nifty index after carefully evaluating all the permutations and combinations of factors that can impact the movement of the bank nifty. We have a very good accuracy of around 90% in our bank nifty calls. Normally our 2nd Target get hits our bank nifty call. Some time when we are very bullish, we tell our traders to buy 5-10 lots of bank nifty.  Risky traders can buy even 15-20 lots to make good profit when we give such call.

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Also Read:

What are the Advantages of Bank Nifty or Nifty Call?