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Thursday 17 May 2012

How to invest in nifty


Nifty is a very common term of share market. The word nifty is a combination of two words 'N'ational and 'F'ifty. It consists of the 50 stocks listed on the National Stock Exchange (NSE) representing 24 different sectors of the economy. Nifty index is basically a simple tool for helping investors understand which stock they should buy and which stock they should avoid. Lets suppose the nifty index is going upwards then you can earn lots of money if u invested it wisely.

Nifty consists of bank nifty and nifty futures. As far as 'nifty futures' is concerned, it means buying or selling for the future. Nifty futures are available in lots. One nifty future consist of 50 derivatives of nifty. Lets suppose nifty is at 5000 and you think it will touch 5500 in 10-15 days. Then you can buy some lots of futures at 5000. As a nifty trade goes upwards you can start making profit and vice versa. This profit and loss is calculated on daily closing price.

Now we talk about the second one which comes under nifty i.e bank nifty. Bank Nifty option is also an Index option whose value is based on Bank Nifty Index. Bank Nifty trading is allowed in bank nifty futures only. Its lot size is 25.The index have 12 stocks from the banking sector which trade on the National Stock Exchange. It is basically an index value for letting you know the fluctuations in the banking sector. It gives you an insight of whole banking market scenario. BANK NIFTY futures contracts have a maximum of 3-month trading cycle and the value of the futures contracts on BANK NIFTY may not be less than Rs. 2 lakhs at the time of introduction.

The companies that are listed in nifty index represent the leading companies in the country. Therefore Nifty is a profitable investment for all those who are looking forward to invest in index. And if you go with the present scenario, there are many Indian & Foreign investors who are coming forward to invest in the Nifty.

Invest Wisely.


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