Trading in futures and options of Bank Nifty on the National Stock Exchange (NSE) commenced on June 13, 2005. The pricing for these contracts is related to the CNX Bank Index. The index measures the performance of the 12 bank shares that enjoy maximum trading volumes and market capitalization on NSE.
The market capitalization of the shares of these banks calculated in terms of free float exceed 90% of such capitalization for the banking sector in India in its entirety. Simply put, this means that, of all the trading in banking sector shares that happens on the (NSE), more than 90% is in these selected 12 banks’ shares.
Bank Nifty Trading
Bank Nifty’s Futures and Options contracts are derived from CNX Bank Index. The index in turn derives its value from the movement in prices of the 12 bank equity shares of which it is constituted.
Present Status
Derivative trading in Bank Nifty has witnessed a burst of activity since its launch 10 years ago. The index has afforded Foreign Institutional Investors (FII), domestic institutional investors and the retail investor an opportunity to hedge their risks in investments in bank shares.
During the FY 2014-15, there were 13.11 crore contracts and turnover of Rs.56,36,150.91 crore (US$ 900.48 billion) in Bank Nifty futures
of Rs.56,36,150.91 crore (US$ 900.48 billion) in Bank Nifty futures
