The stock exchange market of India is vast, with a series of stocks available on the platform for people to trade from. NIFTY 50 is the benchmark based on the stock market index that indicates the Indian equity market. The full form of NIFTY is the National Stock Exchange Fifty, which means that it shows the weighted average of 50 Indian company stocks from 13 different sectors. It is one of the two leading stock indices that are used in India, and the other one is the BSE Sensex.
NIFTY 50 has turned out to be the single most extensive financial product in India by becoming the most actively traded contract. The financial product comprises of exchange-traded funds, exchange-traded options at the NSE in India, and futures and options abroad at the SGX (Singapore Exchange Limited).
What is the NIFTY Option Chain?
Before we go ahead and talk about the NIFTY Option Chain, let us try and understand what an option chain is precise. If you have ever visited the National Stock Exchange website and opened up the NIFTY market, you will notice a table on your screen, that screen is known as the option chain or option matrix which is a listing of the option contracts that are available for trading or puts (sell) and calls (buy) option on the charts. In the middle of the option chain, you’ll notice the term ‘strike price,’ this is the price at which the contract can be bought or sold.
NIFTY Option Chain Analysis
The Option Chain Analysis consists of the two sections- calls and puts where the investor or trader on the call side has bullish predictions for the market. In contrast, the trader or investor on puts side is bearish about the market and expects the stock market to fall. During this analysis, it is essential to remember that the loss of the seller of an options contract is unlimited. In contrast, the damage of buyers for an options contract is limited to the premium.
The essential advantage of having the NIFTY option chain is that all the critical information and data points are available for a user to look at on a single screen. This additional information on the screen includes price change, volume change, IV change, accumulation, unwinding, open interest change, etc.
Bank NIFTY Option Chain
The base period of the CNX Nifty index was 3rd November 1995, and it marked the completion of a year of National Stock Exchanges Equity Market operations. The base value index is set at 1000 and the base capital of Rs.2.06 trillion. The bank Nifty represents the 12 most significant and liquid stocks that are present on the platform from the banking sector. These stocks are traded on the National Stock Exchange and provide the investors with a platform that captures the overall market performance of the banking sector of India.
The bank Nifty option chain is exactly like the typical Nifty option chain; only this chain gives us information about the banking sector of India. Rest all the values like calls, puts, strike price, etc. are represented in the same way in the chart. The space for the Nifty bank provides you information about the active contracts of the day and the volume and turnover of those contracts as well as of the entire market.